What happened to JCPenney?

JCPenney is an American department store chain founded by James Cash Penney and William Henry McManus in 1902. The company filed for bankruptcy in 2020 and after an acquisition, continues to operate in a limited capacity. JCPenney was ultimately crippled by the coronavirus pandemic, becoming one of many retail companies to meet a similar end in the face of sluggish consumer spending and reduced foot traffic.

Introduction of JCPenneyJCPenney, originally known as the Golden Rule Store, was founded in 1902 by James Cash Penney. Over the decades, it became a prominent American department store chain, known for offering a wide range of apparel, home furnishings, and other merchandise. JCPenney’s business model was based on providing quality products at affordable prices, making it a popular destination for middle-class shoppers. The company grew to become one of the largest and most recognizable retail chains in the United States.
Historical SuccessJCPenney experienced significant success and expansion during the 20th century. It established itself as a trusted retail brand with a strong presence in shopping malls and urban centers across the country. The company adopted innovative practices, such as offering catalog sales and introducing private-label brands. JCPenney’s success was also attributed to its commitment to customer service and value-focused pricing. It became a symbol of affordable, quality shopping for American families.
Challenges and Changing Retail LandscapeThe early 21st century brought significant challenges to traditional brick-and-mortar retailers like JCPenney. The rise of e-commerce giants like Amazon and changing consumer preferences posed formidable obstacles. JCPenney faced financial difficulties, including declining sales and competition from discount stores and online retailers. In 2011, the company hired Ron Johnson, a former Apple executive, as CEO, with hopes of revitalizing the brand and modernizing its stores. However, Johnson’s ambitious restructuring efforts, including eliminating sales and coupons, alienated JCPenney’s loyal customer base, leading to a sharp decline in revenue. These challenges reflected broader shifts in the retail industry, where digitalization and changing shopping habits were reshaping the competitive landscape.
Financial Struggles and BankruptcyJCPenney’s financial struggles deepened, and the company faced mounting debt. In May 2020, amid the economic impact of the COVID-19 pandemic, JCPenney filed for Chapter 11 bankruptcy protection. This move was intended to provide the company with a lifeline to restructure its operations and debts while continuing to operate its stores. During the bankruptcy process, JCPenney announced plans to close numerous underperforming stores as part of a cost-cutting strategy. The bankruptcy proceedings marked a critical juncture in JCPenney’s history, as it sought to navigate its way forward amid intense competition and changing consumer behavior.
Sale and RestructuringIn September 2020, following months of negotiations, JCPenney reached an agreement to sell its retail operations to a consortium of mall operators, Simon Property Group and Brookfield Property Partners, along with the financial services company Authentic Brands Group. This deal allowed JCPenney to exit bankruptcy and continue operating as a smaller, more focused company. The new ownership aimed to leverage the company’s brand name and explore opportunities to revitalize JCPenney within the mall ecosystem. The sale represented a significant shift in ownership and strategic direction for the retailer.
Post-Acquisition PlansUnder its new ownership, JCPenney has been exploring various strategies to revive its business. These efforts include enhancing its e-commerce presence, forging partnerships with other retailers, and adapting its in-store experiences to cater to changing consumer preferences. JCPenney has also been reimagining its merchandise mix and store layouts to align with evolving shopping trends. The company’s future hinges on its ability to adapt to the digital age, differentiate itself from competitors, and resonate with a new generation of shoppers. The post-acquisition period represents a critical phase for JCPenney as it seeks to rebuild and redefine its role in the retail landscape.
Conclusion and Future OutlookThe story of JCPenney reflects the challenges faced by traditional retailers in the digital era. The company, once a retail giant, had to confront shifting consumer habits and the disruptive forces of e-commerce. While its bankruptcy and sale marked a significant transformation, JCPenney continues to exist, albeit in a different form. Its journey highlights the importance of adaptability, innovation, and strategic partnerships in navigating the ever-changing retail industry. Whether JCPenney can successfully reinvent itself and regain a solid footing in the market remains to be seen, but its legacy as an iconic American retailer endures as it charts a new path forward.


JCPenney is an American department store chain founded by James Cash Penney and William Henry McManus in 1902.

From a single store in Wyoming, JCPenney became a household name in the 70s and 80s as it took advantage of the surge in popularity of mall shopping.

Indeed, most malls would be anchored by a JCPenney store selling everything from homewares to fashion.

In May 2020, the 118-year-old department store filed for bankruptcy with net losses of $4.5 billion.

The demise of JCPenney is, in some respects, emblematic of the pandemic era for physical department stores. 

In truth, however, the decline of the company was gradual and started long before the onset of the virus.

Poor strategy and mismanagement

With revenue declining by $2.4 billion since the Global Financial Crisis, JCPenney appointed new CEO Ron Johnson in June 2011.

Johnson had a transformative plan for the company and quickly set it in motion.

He hired a team of outsiders to fill critical senior positions, fired 19,000 employees, and removed JCPenney’s discount pricing strategy.

Then, he instituted a massive store revamp without verifying that it would resonate with consumers.

Employee morale suffered as a result of the mass terminations. Revamped stores featured an Apple-esque genius bar, with Johnson drawing inspiration from his time at Apple. Ultimately, the genius bar did not inspire shoppers. 

When the company banned the word ‘sale’ from its promotions and replaced it with ‘month-long savings’, consumers became confused over the new pricing system.

The near-constant discounting cycle damaged the JCPenney Brand. When the company shifted its focus to affluent shoppers, it alienated its traditional, value-seeking customer base.

Johnson was fired just 16 months after being appointed. Sales fell by 25% under his tenure, equating to a further $4.3 billion loss in revenue.


The coronavirus pandemic and subsequent shift to purchasing online became the straw that broke the company’s back. 

JCPenney filed for bankruptcy on May 15, 2020, and announced the immediate closure of 242 stores.  

In fact, the company became one of 20 retail businesses that would go bankrupt because of the pandemic in North America.


In September 2020, JCPenney was acquired by Simon Property Group and Brookfield Asset Management in a cash and debt deal worth around $800 million.

Post-acquisition, the new owners plan to close nearly a third of all remaining JCPenney stores in the next two years.

The company headquarters in Plano, Texas, was also vacated with no new location as yet announced.

The future remains uncertain for the company as consumer spending and bricks-and-mortar shopping continue to be impacted.

This was highlighted by findings released by Mastercard in late 2020 showing that department store sales – once the bread and butter of JCPenney – had declined by 10.2% over the October-December holiday period.

Key takeaways:

  • JCPenney is an American department store chain founded by James Cash Penney and William Henry McManus in 1902. The company filed for bankruptcy in 2020 and after an acquisition, continues to operate in a limited capacity. 
  • JCPenney posted billion-dollar losses after the GFC and in response, appointed new CEO Ron Johnson. Unfortunately, Johnson alienated the company’s target audience by focusing on the affluent market and revamping JCPenney stores without validating his ideas.
  • JCPenney was ultimately crippled by the coronavirus pandemic, becoming one of twenty such companies to meet a similar end in the face of sluggish consumer spending and reduced foot traffic.

Key Highlights

  • JCPenney is an American department store chain founded in 1902, known for its popularity during the mall shopping era.
  • In the aftermath of the Global Financial Crisis, JCPenney faced declining revenue and appointed new CEO Ron Johnson in June 2011 to turn the company around.
  • Johnson implemented a transformative plan, hiring outsiders for critical positions, firing 19,000 employees, and removing JCPenney’s discount pricing strategy.
  • He initiated a massive store revamp, but the changes did not resonate with consumers, and employee morale suffered due to the mass terminations.
  • The revamped stores featured an Apple-inspired genius bar, but it failed to attract shoppers as Johnson had hoped.
  • Changing the pricing system, replacing ‘sale’ with ‘month-long savings’, confused consumers and damaged the JCPenney brand.
  • Johnson’s focus on affluent shoppers alienated the traditional value-seeking customer base.
  • Sales fell by 25% under Johnson’s tenure, resulting in a further $4.3 billion loss in revenue.
  • The coronavirus pandemic and the shift to online shopping dealt a severe blow to JCPenney, leading to its bankruptcy filing on May 15, 2020.
  • The company closed 242 stores immediately after filing for bankruptcy, becoming one of 20 retail businesses to go bankrupt due to the pandemic in North America.
  • In September 2020, JCPenney was acquired by Simon Property Group and Brookfield Asset Management in a cash and debt deal worth around $800 million.
  • Post-acquisition, the new owners plan to close nearly a third of all remaining JCPenney stores in the next two years.
  • The company’s headquarters in Plano, Texas, was vacated with no new location announced yet.
  • The future remains uncertain for JCPenney as consumer spending and bricks-and-mortar shopping continue to be impacted.
  • Department store sales, once the bread and butter of JCPenney, declined by 10.2% over the October-December holiday period according to Mastercard’s findings released in late 2020.

Other Failure Stories

What Happened to WeWork

WeWork is a commercial real estate company providing shared workspaces for tech start-ups and other enterprise services. It was founded by Adam Neumann and Miguel McKelvey in 2010. WeWork’s business model was built on complex arrangements between the company and its landlords. There were also several conflicts of interest between Neumann and WeWork, which provided the impetus for the failed IPO and significant devaluation that would follow.

What Happened to Netscape

Netscape – or Netscape Communications Corporation – was a computer services company best known for its web browser. The company was founded in 1994 by Marc Andreessen and James H. Clark as one of the internet’s first and most important start-ups. The Netscape Navigator web browser was released in 1995 and became the browser of choice for the users of the time. By November 1998, it had been acquired by AOL, which tried unsuccessfully to revive the popularity of the web browser. Ten years later, Netscape was shut down entirely.

What Happened to Musical.ly

Musically, or Musical.ly as it is officially known, was a Chinese social media platform headquartered in Shanghai. After passing 200 million users in May 2017, the platform was shut down by tech company ByteDance in November. After its acquisition, ByteDance suggested Musical.ly would continue to operate as a standalone platform. Company representatives noted that it would be able to leverage ByteDance’s AI technology and enormous reach in the Chinese market. Musically was ultimately absorbed into TikTok in June 2018, with the app no longer available in August of the same year. Existing users were offered technical support and several new features as a sweetener.

What Happened to Vine

Vine was an American video social networking platform with a focus on looping video clips of six seconds in length, founded by Dom Hofmann, Rus Yusupov, and Colin Kroll in 2012 to help people capture casual moments in their lives and share them with their friends. Vine went on to become a massively popular platform. Yet by 2016, Twitter discontinued the mobile app, allowing users to view or download content on the Vine website. It then announced a reconfigured app allowing creators to share content to a connected Twitter account only. This marked the end of Vine.

What Happened to CNN Plus

CNN Plus was a video streaming service and offshoot of CNN’s cable TV news network that was launched on March 29, 2022. The service was ultimately shut down just one month after it was launched. Trouble began for the platform when parent company WarnerMedia merged with Discovery. The latter was unimpressed with paltry viewer data and, with $55 billion in debt to clear, was not interested in funding CNN+ moving forward. Other contributing factors to CNN Plus’s demise include a lack of compelling content and streaming service market saturation.

What Happened to Clubhouse

Clubhouse is a social app that allows thousands of people to communicate with each other in audio chat rooms. At one point, the company was worth $4 billion and boasted users such as Mark Zuckerberg and Elon Musk. Clubhouse declined because it rode the wave of pandemic lockdowns and suffered when people resumed their normal routines. The decision to remove the invite-only feature also caused a rapid influx of new members and removed any exclusivity. Clubhouse management also failed to define a business model and was unaware of the components of a successful social media site.

What Happened to Facebook


What Happened To Carvana

Carvana is an American online used car retailer headquartered in Tempe, Arizona. The company – which sells cars in unique vending machines – was the fastest-growing used vehicle retailer in the United States, with revenue of $3.94 billion in 2019. Yet by 2022, on $12.8 billion in revenue, the company reported almost $2.9 billion in net losses.

What Happened To Houseparty

Houseparty was an app-based group video chat platform for mobile and desktop. Released in February 2016, the platform rapidly grew to hundreds of millions of users and was the #1 social app in 82 countries by May 2020. Less than 18 months later, however, owner Epic Games announced that it would be shutting down the app in October 2021. Let’s explain the reasons for Houseparty’s demise below.

What Happened To ChaCha

ChaCha was a human-guided search engine founded in 2006. The platform provided a valuable service at a time when traditional search engine algorithms were unreliable and less developed. When algorithms did become sufficiently developed, they provided answers to questions for free and much more rapidly than ChaCha could. The ChaCha business model was also unscalable, with employees overworked as the company tried to stay ahead of innovation. ChaCha’s demise was also compounded by the smartphone, which provided another avenue for consumers to find information. A belated attempt to restructure and cut costs followed, but the company could not service its debt past 2016.

What Happened To RadioShack

RadioShack is an American electronics retailer founded by brothers Milton and Theodore Deutschmann in 1921. The company enjoyed market dominance in the 70s and 80s but faded fast after a slew of missed opportunities. RadioShack operated over four thousand stores in the USA, but many were placed too close together which caused sales cannibalization. These stores were also often small and had a confusing inventory mix. RadioShack sold the first mass-produced personal computer with much success. However, the company saw no future in personal computers because of the high cost of hardware. It then instructed sales managers to intentionally keep PC sales under a certain threshold.

What Happened To Compaq

Compaq was an American developer and producer of computer products and services. After strong initial success, the company was acquired by HP in 2002 with the Compaq brand retired in 2013. Compaq’s short-sighted acquisition of DEC provided the catalyst for its decline. While the company was dealing with the ramifications of the acquisition, competitors such as Dell and Gateway increased their market share. Compaq also experienced a loss in revenue after the dot-com bubble burst. This was exacerbated by the standardization of chipsets and motherboards by Intel.

What Happened To Kodak

Kodak is an American photography product and service company founded in 1892 by George Eastman and Henry A. Strong. After dominating the photographic film industry for decades, the company filed for bankruptcy in 2012. Kodak was not ignorant of digital camera technology. But it did fail at various stages to commit to digital products entirely despite overwhelming evidence that the technology would prove profitable. Kodak was also the victim of the changing retail landscape and consumer sentiment toward foreign products in the United States. Blind in its devotion to printing, it also missed an opportunity to create a Facebook-style photo-sharing website three years before Facebook itself was conceived.

What Happened To Friendster

Friendster was a social networking site that then transitioned to a gaming platform. Ultimately, Friendster failed to capitalize on its early success as one of the first social media platforms to experience mass uptake. When Friendster became a gaming platform, it failed to notify its user base. This set in motion the migration of users to Facebook which would continue for some years. Friendster’s decision to raise funds via venture capital funding populated its board with investors who were not interested in technology or innovation. The company was acquired by MOL Global in 2009 who then sold its patents to Facebook soon after.

What Happened To StumbleUpon

xStumbleUpon was an early social network founded by Garrett Camp, Geoff Smith, Justin LaFrance, and Eric Boyd. At one point, the platform was responsible for half of all social media traffic in the United States. StumbleUpon suffered intense competition from the likes of Pinterest, Digg, and Reddit – both in terms of site functionality and monetization strategy. After a failed partnership with eBay, Camp bought back the company and instituted a major redesign to limited success. The StumbleUpon user experience became outdated as consumers preferred to waste time scrolling through news feeds. Upon this realization, Camp shut down the service in 2018 to focus on a more modern iteration called Mix.com

What Happened To Altavista

Altavista was a pioneering search engine developed by a group of Digital Equipment (DEC) researchers. It was originally created to showcase the power of a then-revolutionary DEC supercomputer. After an ominous partnership with Yahoo in 1996, AltaVista underwent a series of acquisitions and format charges as several companies tried to make it profitable. In the process, the search engine lost market share to up-and-comer Google. Yahoo acquired AltaVista in 2003 and absorbed the technology behind the search engine into its own platform. AltaVista was formally put to rest ten years later.

What Happened To Blockbuster

Blockbuster was an American movie and video game rental chain. The company went from industry leader to filing for bankruptcy with $1 billion in debt in less than a decade. Blockbuster relied on late fees to drive a high proportion of revenue. This strategy proved uncompetitive after Netflix offered fee-free movie rentals by mail. Blockbuster lost significant market share to Netflix in the ensuing years and experienced a decline in profit after abolishing late fees in an attempt to remain competitive. Blockbuster’s demise is mostly due to an inability to innovate. Although passing on the offer to purchase Netflix is noteworthy, the company failed because of a myopic focus on its outdated rental franchise model.

What Happened To Napster

Napster was a peer-to-peer music-sharing software application. It was the first such platform to provide free access to the full history of recorded music online. Napster quickly attracted the attention of music artists, with Metallica instigating court proceedings against the company for copyright infringement and the distribution of unreleased music. Napster was forced to shut down after the Recording Industry Association of America won a court injunction. Mounting legal fees and compensation costs led to the company filing for bankruptcy in 2002.

What Happened To BlackBerry

BlackBerry is an iconic smartphone brand owned by Canadian company BlackBerry Limited. The company enjoyed first-mover status in the smartphone industry, but ultimately squandered its advantage. BlackBerry was ignorant and in some ways disrespectful of competitors in the industry. It was more concerned with protecting its proprietary technology than innovating to stay relevant. Though profitable to some extent, BlackBerry’s focus on enterprise customers came at the expense of the far more lucrative consumer market. Government opposition to censoring information also eroded one of the core strengths of the company’s smartphone.

Why Nokia Failed

Nokia is a Finnish telecommunications, consumer technology, and information technology company founded in 1865. It enjoyed 51% of the global market share for mobile phones in 1998. Nokia’s device-based hardware system was cumbersome and outdated, but the company persisted with it while competitors developed the software-based iOS and Android operating systems. By the time Nokia phones offered Android, the company had been left behind. Corporate mismanagement within Nokia was rife and culture suffered as a result. Internally and externally, the company failed to acknowledge its diminishing relevance and market share.

What Happened To Xerox

Xerox is an American corporation selling print and digital document products and services worldwide. The company failed to capitalize on revolutionary research performed at its PARC R&D center. Xerox was visited by Steve Jobs in 1979 who gained access to PARC in exchange for Xerox receiving shares in Apple. He then purchased the rights to a Xerox GUI and used it to produce the Apple Macintosh. Xerox released the Xerox Star personal computer in 1981 in a rare example of the company selling an innovative product commercially. However, the Star was prohibitively expensive, targeted the wrong market, and was a decade ahead of its time.

What Happened To Quibi

Quibi was an American short-form streaming service for smartphones. Unfortunate timing with the onset of the COVID-19 pandemic is at least partly responsible for the failure of the platform. Despite billions being invested in securing high-end talent and production studios, Quibi content was generally poor quality. In any case, there was no way for consumers to share or engage with the content they did enjoy. Quibi was not helped by its pricing strategy and the presence of established competitors offering more for less. It was also improperly and inadequately marketed.

About The Author

Scroll to Top