Department store JCPenney skipped most of its May rent, a troubling sign as the retailer reportedly hurtles towards a potential bankruptcy filing, a new report shows.
As of May 8, the retailer paid eight percent of its monthly rent for May, compared with 88 percent in the same period a year ago, according to the report from Datex Property Solutions. The move is a turnaround from April, when JCPenney paid 96 percent of the rent on its nationwide portfolio, in contrast with many fashion retailers and department stores who skipped rent entirely.
JCPenney did not immediately respond to a request for comment.
JCPenney recently missed two debt payments, and is reportedly exploring the option to file for bankruptcy. The retailer missed a $12 million interest payment on its corporate bonds on April 15, and a $17 million interest payment on a term loan on May 7, according to its SEC filings. The 30-day grace period for the former, and five-day grace period for the latter, both ends this week, which could trigger a bankruptcy, Bloomberg reported.
The 118-year-old company closed its 850 department stores in March in response to the novel coronavirus outbreak and furloughed 85,000 workers. Like many other department stores, JCPenney had its difficulties before the pandemic forced it to close stores, and has nearly $4 billion of debt on its books as of February.
Coming on the heels of the high-profile bankruptcies from Neiman Marcus and J. Crew, a JCPenney bankruptcy would mark the latest retail casualty of the pandemic, as already vulnerable retailers fail to weather the crisis.