According to reports from CNN, the company was already facing challenges, and now with the rapid spread of COVID-19 causing businesses to remain closed for the foreseeable future, it doesn’t look like the company will be able to withstand the lack of business coming through their doors.
“Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy — and our efforts had already begun to pay off,” CEO Jill Soltau said about the decision. “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.”
After that news broke, the company also decided to approve bonuses of one million dollars or more to its top four executives. It seems like a weird move, for a company filing for bankruptcy, but their reasoning actually makes a lot of sense.
“At J.C. Penney, we are making tough, prudent decisions to protect the future of our company and navigate an uncertain environment, including taking necessary steps to retain our talented management team,” the company said in a statement.
As CNN points out, the plan seems to be designed to try and keep the executives on-board as the company goes down a tough path. Executives who resign before January 31, 2021 will be forced pay back 80 percent of their bonuses, plus, they will have to repay the other 20 percent if certain milestone-based performance goals are not met.
Even though we’re already used to seeing retail companies file for bankruptcy, we’ve going to be seeing it a lot more of this same story in the coming months.