Struggling retailer JC Penney (JCP) is reportedly moving one step closer to filing for bankruptcy protection as it is in talks to secure debtor-in-possession (DIP) financing

According to sources for the Wall Street Journal, the company is looking to procure around $800 million to $1 billion in DIP loans from Wells Fargo, Bank of America, and JPMorgan Chase & Co. However, the sources said the exact loan amount could change.

JC Penney has seen its share of challenges over the last year, closing stores, shuttering a call center, and laying off workers as it looked to transform its image to draw in customers. The overhaul was stalled as the coronavirus pandemic forced the closure of all of JC Penney’s stores along with furloughs of the majority of its employees.

On April 15, JC Penney skipped a $12 million interest payment, saying in its Securities and Exchange Commission (SEC) filing that it would use the 30-day grace period to explore its financial options. At the time, the company did not say it would be filing bankruptcy.

The DIP financing is expected to be syndicated so that other lenders can participate in the lending, the WSJ said. The bankruptcy filing is anticipated to come in the next few weeks, according to the news outlet.

JC Penney is not the only retailer that could file for bankruptcy in the coming weeks. Neiman Marcus is expected to restructure, filing for bankruptcy protection as soon as Sunday, according to CNBC. Gap Inc. has also said it is financially struggling and may not have enough cash to survive the next 12 months, according to its SEC filing.

Shares of JC Penney stock were down 11.78% as of 3:22 p.m. EDT on Friday.

J.C. Penney Store Revival J.C. Penney store. Photo: REUTERS