After skipping most of its May rent payments, J.C. Penney ($JCP) has only a few days left before it will have to declare bankruptcy. The 118-year-old company would join a growing lot of Coronavirus retail casualties, including J.Crew ($PRIVATE:JCREW) and Neiman Marcus ($PRIVATE:PRIV_NEIMANMARCUS). The retailer, previously worth billions, is now valued at only $79 million.
On April 15, J.C. Penney missed a $12 million interest payment and was granted a 30-day grace period to solve the dilemma. The company is now close to obtaining $450 million in funding to support a Chapter 11 restructuring. And while that accounts for less than half of the $1 billion the retailer initially requested, it would allow J.C. Penney to rehire furloughed workers and re-open its 850 stores. But a swift recovery is looking increasingly unlikely.
The company’s job openings were already declining before the pandemic hit, and now they’re plummeting. Since the beginning of the year, J.C. Penney’s job postings have been slashed 25%.
Consumer interest isn’t enough to save the company. That said, with 59,900 Facebook mentions, J.C. Penney has been getting way more social media attention than it was a year ago, 135% more to be exact. Last November, the company hit a high of 103,000 mentions. Its Facebook likes have also jumped since last year. That's a lot of buzz for a company going out of business.
Over on Twitter, the company has lost 5% of its followers over the last two years. That means people are going out of there way to click "unfollow" and actively expressing disinterest in J.C. Penney.
Online sales haven't been able to compensate for the lack of in-store purchases. According to Bloomberg's projections, if stores open in the second quarter, J.C. Penney would lose 35% in annual sales for 2020. If stores remain closed for the year, sales would drop by 71%.
What's worse, Sephora ($EPA:MC) announced it wanted to end their business partnership three years early. Sephora's store-in-store boutiques had been crucial to J.C. Penney's recovery plan, generating foot traffic, and driving business.
A turnaround isn’t completely impossible. The company has a strong management team, including CEO Jill Soltau and chairman Ronald Tysoe, to lead a restructuring plan. But the clock is ticking.
About the Data:
Thinknum tracks companies using the information they post online - jobs, social and web traffic, product sales, and app ratings - and creates data sets that measure factors like hiring, revenue, and foot traffic. Data sets may not be fully comprehensive (they only account for what is available on the web), but they can be used to gauge performance factors like staffing and sales.
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