With the department store number just down precipitously in April from March, also down really sharply year-over-year JCPenney.
As a part of that, they’d started to open up some of their stores. Of course, we wondered if and when a bankruptcy filing might become, and you will all have been going over here.
J.C. Penney $17 Million Interest Payment
It does look as if JCPenney has made the 17-million-dollar interest payment, so it did not default on that. There was, however, another twelve-million-dollar interest payment that the retailer had missed in about mid-April. So, still waiting on some more clarity about what’s happening there.
So, just because we don’t have this filing this official bankruptcy filing from JCPenney doesn’t mean that they’re not scrambling behind the scenes and that we may be hearing it soon. But it is essential to point out that they did make this seventeen-million-dollar payment.
Sephora contractual relationship with JCPenney
You might also remember a bit of a skirmish with Sephora, its partner that has those Sephora shops and shops, and JCPenney stores, and Sephora had been sort of reluctant to continue this contractual relationship with JCPenney.
Everything was going on, and there were some court battles back and forth in both the state and federal courts. Ultimately, though, both of those parties did agree to continue working together. However, we weren’t privy to the further detail, so that at least got dropped. But if JCPenney ends up filing for bankruptcy and has a store closure program, of course, many of these contractual terms may still get further amended.
JCPenney downward in Covid-19 Pandemic
It’s also essential for Courtney to point out that JCPenney has been in a long downward spiral. Even going into this pandemic and – and like J. Crew and Neiman Marcus – had Big problems with debt and bringing customers back. This was not one of the retailers that were doing well and so in terms of claiming the victim from the crisis.
So far, we’re still seeing the losers being hit. The hardest, the other thing I would say, is to look at the XRT that’s the tail ETF. It has seen a turnaround. We would pin that on the consumer confidence numbers that we got Courtney at the top of the hour, which showed surprising confidence from consumers. University of Michigan confidence number 73.7 betters than expected the 68 was the consensus.
We think that also points to the fact that April, you know this idea out there that the April retail sales that we got today, which were so dismal so poor, could be the bottom right.
There are green shoots as stores start to reopen as states begin to reopen, and you saw that in the confidence numbers. Confidence numbers better than expected, but certainly well off the numbers that we saw before All of this crisis hit; we all know what the employment picture looks like, right.
Now we’ll see what happens, as you point out, Sarah, when the stores begin to reopen. Some of these furloughed JCPenny Kiosk employees come back to the stores and how that may shake out also because they’re their consumers too, right.
So, they’re employees of these stores, but if they are employed. You would imagine that that would give them more confidence to come back and spend their dollars in their stores.