By Lenore Fedow
J.C. Penney Co. Inc. filed for Chapter 11 bankruptcy protection late Friday with plans to reduce its store footprint.
Plano, Texas— J.C. Penney Co. Inc. filed for Chapter 11 bankruptcy protection late Friday as it struggled with mounting debt and the effects of the coronavirus pandemic.

Founded in 1913, the department store chain employs 85,000 workers across more than 850 locations and ranks as one of the largest sellers of fine jewelry in North America.

In National Jeweler’s 2019 State of the Majors report, J.C. Penney stood at No. 9 on the list of $100 Million Supersellers with an estimated $816 million in annual jewelry and watch sales.

The retailer plans to restructure in an effort to reduce debt by several billion dollars.

Store closures will follow in phases, with details and timing to be disclosed in the coming weeks, the company said in a news release announcing its restructuring.

The retailer may close 180 to 200 stores as part of its restructuring, CNBC reported.

“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,” said CEO Jill Soltau in a statement announcing the restructuring.

The company said it will continue to work toward the goals set out in its turnaround plan, which include driving traffic and upgrading the shopping experience, but noted “challenging” market conditions have hampered its efforts to meet its current operational and financial objectives.

The retailer raised eyebrows last week when, amid missed debt payments and the furloughing of many of its 85,000 employees, it paid million-dollar bonuses to its executives, which it said was designed to retain talent in an “uncertain” environment.

Soltau received $4.5 million while Chief Financial Officer Bill Wafford, Chief Merchant Michelle Wlazlo and Chief Human Resources Officer Brynn Evanson each received $1 million.

The retailer is gradually reopening stores, offering contact-free curbside pickup service at all open stores, and will continue to fulfill online orders.

JC Penney had approximately $500 million in cash on hand as of its filing date.

The company has received commitments for $900 million in financing from its existing first lien lenders, including $450 million in new funds.

The New York Stock Exchange notified the retailer that it would be delisted from the exchange, as per an SEC filing Monday, a decision JC Penney said it does not plan to appeal.

JC Penney’s bankruptcy filing follows Neiman Marcus’ Chapter 11 filing last week as department stores continue to struggle to compete with more innovative retail models.

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