J.C. Penney expects to close a third of its stores; status of Delaware locations unknown

After filing for Chapter 11 bankruptcy late last week, J.C. Penney is planning to close to a third of its stores, according to Bloomberg.

What that means for Delaware's three locations, which anchor some of the state's most popular brick-and-mortar shopping destinations including the Christiana Mall, is not yet clear. J.C. Penney will likely announce specific store closures in the coming weeks.

The company is set to lose almost 250 stores and is saddled with more than $4 billion in debt. With the majority of its 846 stores shut down due to the coronavirus pandemic, retail analysts paint a picture of a bleak future, one that could involve more closures and further restructuring.

"I don’t think that J.C. Penney is going to be one of those companies that emerges," said Camilla Yanushevsky, a retail stock analyst for CFRA Research. "At the end of the day, I think they’ll be liquidating their assets to get some cash back to creditors."

"Other than Netflix and Peloton, I don't know who is going to see an increase in revenues," said Patrick Gourley, an assistant professor of economics and business analytics at the University of New Haven.

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J.C. Penney has stores in the Christiana Mall, the Prices Corner shopping center and the Dover Mall. Representatives from each center declined comment or did not respond to requests for comment.

Government-mandated shutdowns related to the coronavirus pandemic have accelerated trends in the retail industry, most notably the shift toward online sales. Even as stores begin to reopen, it's unclear how customers will respond and whether they'll ever return in the same numbers.

"It's tough to say what people are actually going to do," Gourley said. "The reality could be that consumers go back to normal faster or slower than what the surveys are saying."

Malls and shopping centers could be left scrambling to replace anchor tenants like J.C. Penney, that have been staple stores and key to their success for decades.

Experts have said the Christiana Mall is best positioned to weather the effects of the coronavirus pandemic, due to its size, high occupancy rates and regional appeal.

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The Prices Corner shopping center is already being reshaped, under construction as part of a previously planned redevelopment project. Crews are converting the former Sears to a Target, adding a Chick-fil-A and will give the shopping center a new facade.

J.C. Penney's bankruptcy filing comes after several years of declining sales and strategic missteps as the company careened from one reinvention strategy to another. According to FactSet, the retailer lost money in eight of the last nine years, totaling $4.45 billion.

It's one of several mall-based retailers that filed for bankruptcy in recent weeks, joining J Crew and Neiman Marcus. Green Street Advisors, a commercial real estate analytics firm, estimates that more than half of all mall-based department stores will close by the end of 2021.

"J.C. Penney has been losing shoppers, it's been losing market share and it's been losing sales over a very long period of time because the products it provides and the way in which it provides them has just become increasingly irrelevant to consumers," said Neil Saunders, managing director of GlobalData Retail.

USA TODAY contributed to this report.

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Contact Brandon Holveck at bholveck@delawareonline.com. Follow on Twitter @holveck_brandon.