According to Reuters, the 118-year-old American department store J.C. Penney is considering filing for bankruptcy protection after being forced to close 850 stores due to the impact of the new coronavirus epidemic. Previously, the company had furloughed nearly 85,000 employees.
Picture source: Foreign media screenshots
Worth it Note that currently, there are more than 600,000 confirmed cases of COVID-19 in the United States. COVID-19 is spreading rapidly in the United States, and various impacts on the U.S. economy have begun to appear. In the three weeks from March 16 to April 5, the number of initial jobless claims in the United States increased sharply, with a total of more than 16 million.
U.S. President Trump recently stated that he believes that some states can lift strict social isolation measures before the end of April, and their economies are expected to restart before May 1.
J.C. Penney is considering filing for bankruptcy protection
A few days ago, Reuters quoted people familiar with the matter as saying that the 118-year-old American department store J.C. Penney is considering filing for bankruptcy protection. .
Its official website shows that J.C. Penney was founded in 1902 and is one of the largest clothing and home furnishing retailers in the United States, with 850 stores across the United States.
Image source: J.C. Penney official website
According to Reuters, affected by the new coronavirus epidemic, J.C. Penney was forced to temporarily close 850 stores. The above-mentioned people familiar with the matter revealed that although its revenue has dried up due to the closure of stores, J.C. Penney still has sufficient funds to support operations in the coming months.
The person added that J.C. Penney is nonetheless considering filing for bankruptcy as a way to help the company address its precarious financial situation and free up expenses to pay down debt.
The looming debt problem is a major reason for considering filing for bankruptcy protection.
According to Reuters, J.C. Penney needs to repay about $12 million in debt on Wednesday and $105 million in bonds in June. According to documents submitted to regulators, J.C. Penney must also cope with annual interest payments of about $300 million and faces more than $2 billion in debt due in 2023.
In a recent statement, a spokesperson for J.C. Penney said, “The company has been in discussions with its creditors since mid-2019 to explore various options to enhance its balance sheet and financial flexibility. Conduct an evaluation. Because of the impact of the epidemic, our stores are closed, so in this case, this discussion and evaluation are even more important.”
In addition, the spokesperson also added that the epidemic has Having brought unprecedented challenges, the company remains focused on its turnaround plan and looks forward to reopening its stores.
Image source: J.C. Penney official website
Earlier this year, J.C. Penney persuaded creditors to postpone upcoming payment dates without going through bankruptcy proceedings , this part of the loan is part of the company’s long-term $4 billion loan.
According to Reuters, J.C. Penney has made progress in its turnaround plan, exceeding its 2019 financial goals, increasing same-store sales, and reducing inventory, focusing on selling mid-priced clothing to the middle class. Transfer, which is both J.C. Penney’s core business and also highly profitable.
But the outbreak disrupted J.C. Penney’s plans. The sources told Reuters that J.C. Penney has furloughed nearly 85,000 employees and cut expenses.
In addition to considering filing for bankruptcy to solve the debt problem, J.C. Penney is also considering asking creditors to give space to deal with the debt without going through bankruptcy proceedings. Another person familiar with the matter revealed that J.C. Penney may also receive aid funds.
The source said that at present, J.C. Penney has not made any final decision.
It is worth noting that according to data compiled by Bloomberg at the end of March, more than 500,000 retail industry employees in the United States have no longer received wages due to the shutdown. Bloomberg predicts that millions of people will face the possibility of being furloughed or laid off due to the shutdown of the retail industry. According to the U.S. Bureau of Labor Statistics, nearly 16 million people work in the retail industry, from gas stations to fashion boutiques. The vast majority of them are store assistants, with an average annual salary of $24,000 and an average hourly wage of $11.70.
U.S. unemployment data continues to worsen
According to CCTV News, according to the United States The National Broadcasting Corporation (NBC) reported on April 9 that about 6.6 million people in the United States registered for unemployment assistance for the first time last week (March 30-April 5), bringing the number of people applying for unemployment assistance in the United States to 3.6 million in the past three weeks (3 From April 16th to April 5th), it reached an astonishing 16 million.
Data as of Thursday, the 9th, indicate that 4.5 million to 7 million people will apply for unemployment assistance for the first time that week. “Right now,” said Darrell Cronk, a financial investment advisor at Wells Fargo.Judging from the situation, I think the only factor that can affect this number is the speed at which the government processes applications. The impact of the epidemic on the labor market will greatly damage expectations for U.S. economic growth. “He predicted that U.S. gross domestic product in the second quarter will decrease by 22% from the previous quarter.
Mark Zandi, chief economist of Moody’s Analytics, said that currently It seems that the unemployment rate in the United States has clearly risen to double digits, and will even reach the terrifying 15%. As US President Trump proposes to extend the “stay at home order” until April 30, state governments are gradually introducing more stringent measures Due to travel restrictions, catering, entertainment, leisure and retail companies were the first to be affected. However, millions of people applying for unemployment assistance every week show that every corner of economic life is difficult to avoid the impact of the epidemic.
According to the Economic Information Daily, some economists predict that the U.S. economy will experience the largest contraction in history in the second quarter. By July, 20 million people will be unemployed in the United States, and the U.S. job market will fall into a situation rare since the Great Depression. Bloomberg’s U.S. Recession The probability model shows that the possibility of the U.S. economy entering a recession has reached 100%, and in February this year, the reading was 33%.
Fauci: The time for the United States to restart its economic life has not yet come
According to data from Johns Hopkins University, as of 18:31 EST on the 14th, the number of COVID-19 cases in the United States has There are 602,989 confirmed cases of pneumonia and 25,575 deaths.
According to CCTV news, Trump announced the establishment of an advisory group on the 14th to provide advice and suggestions for economic recovery. Its members include hundreds of people from almost all industries. Executives, including Apple CEO Cook, Walmart President Doug McMillon, Las Vegas Sands CEO Sheldon Adelson, New England Patriots owner Kraft, etc. In addition, the list also includes Including former Secretary of State Rice and other political circles and think tank figures.
Trump said that day that he believed these respected people would provide us with “very good ideas.”
In addition, According to a CNBC report quoted by Global Network, Trump stated at a regular briefing at the White House on the 14th that he believed that some states can lift strict social isolation measures before the end of April, and their economies are expected to restart before May 1. “That ( day) is very, very close, maybe even before May 1st. ”
Picture source: CNBC screenshot
It is worth noting that according to CCTV News, on April 14, local time, Anthony, an expert on the US White House New Crown Pneumonia Team ·Fauci said that it is “not yet time” to reopen the United States. If social isolation measures begin to be relaxed at this time, more infections will occur.
Fauci said that before restarting the United States’ recovery path, “Effective measures must be deployed, and we haven’t reached that time yet.” Fauci said that although the deadline promulgated by many places is early May, for many regions, the expectation of opening the United States from next month 1 is “too optimistic.” .</p
