J.C. Penney, the last remaining of the original three anchor tenants at North Riverside Park Mall, filed for Chapter 11 bankruptcy protection in U.S. Bankruptcy Court in Texas on May 15, the latest retail sales giant fighting for its survival in the midst of a pandemic that has devastated commerce nationwide.
According to a news release issued by the company Friday evening, J.C. Penney has entered into a restructuring support agreement with lenders, whose goal is “to reduce several billion dollars of indebtedness, provide increased flexibility to help navigate through the coronavirus (COVID-19) pandemic and better position J.C. Penney for the long-term.”
The company announced that it would be closing stores in phases throughout the bankruptcy process, but did not detail which locations would be closing or when.
“The first phase of closures, including specific store details and timing, will be disclosed in the coming weeks,” the company said.
The 118-year old company operates nearly 850 stores in 49 states, including the one in North Riverside, which in 1975 joined Montgomery Ward and Carson Pirie Scott as anchors of the new shopping center.
Prior to the move to North Riverside, Penney’s operated a store at Cermak Plaza in Berwyn, opening there in 1956.
“Implementing this financial restructuring plan through a court-supervised process is the best path to ensure that J.C. Penney will build on its over 100-year history to serve our customers for decades to come,” said CEO Jill Soltau in the news release.
Whether the company will exit bankruptcy intact is anyone’s guess at this point. North Riverside has seen a string of major retailers seek bankruptcy protection with promises of sunny days ahead – Sports Authority, H.H. Gregg, Carson Pirie Scott, Toys R Us, Sears, Payless Shoe Source and Forever 21 among them – but rarely has that panned out.
Forever 21 exited bankruptcy with its North Riverside location intact and with new ownership. Sears survived when its chairman, Eddie Lampert, bought the bankrupt company.
Sears, however, hangs on as a shell of its former self with its North Riverside location – it replaced Montgomery Ward, which dissolved in 2001 – just half the size of its former footprint.
The bankruptcy filing comes just a day after an SEC filing by J.C. Penney revealed that the company was handing out millions of dollars in cash bonuses to top executives.
Soltau, the CEO, was handed a bonus of $4.5 million while three others were each given $1 million bonuses. In accepting those bonuses, the executives forfeit their right to participate in the company’s 2020 bonus plan or receive any long-term incentive awards. They also forfeit any equity or equity-based awards.
The bonuses, which were paid immediately, are to be largely repaid if the executives are terminated for cause or resign without “good reason” before Jan. 31, 2021.