J.C. Penney Sues to Block Sephora Closing In-Store Boutiques

(Bloomberg) -- Struggling U.S. department-store chain J.C. Penney Co. asked a Texas judge to prevent the shutdown of in-store beauty boutiques run by Sephora USA Inc., which is demanding the retailer use specialty sanitizers and rethink their relationship.

Sephora has threatened to immediately close all its boutiques at the Texas-based department store chain, which would leave the retailer without any beauty products to attract shoppers when it reopens about nine stores this week.

In March, J.C. Penney closed its nearly 850 stores in the U.S. to help stem the spread of the coronavirus outbreak. A handful of stores have since reopened, and the retailer is offering curbside services at about 30. The company made rent payments last month but said it was skipping an interest payment on its outstanding debt, raising the prospect of a default.

Sephora has complained about boutique employees being furloughed during the pandemic and is demanding that all hard surfaces be cleaned with a special electrostatic spray. J.C. Penney said in court filings that Sephora must follow internal procedures to address its concerns.

Rob Shapiro, a lawyer for Sephora, didn't immediately return a call or email seeking reaction to the suit. Sephora's corporate spokesman couldn't immediately be reached.

Sephora started making its escalating series of demands on April 14, J.C. Penney said in court papers filed Friday and Monday in federal court in Sherman, Texas. By April 24, Sephora said it wouldn't reopen its in-store beauty boutiques and would starve the shops of products unless J.C. Penney agreed to prematurely end its 16-year relationship with Sephora by April 2021. Sephora has said it doesn't plan to reopen any of its standalone boutiques until at least May 22.