J.C. Penney is exploring filing for bankruptcy protection after the coronavirus pandemic forced the U.S. retailer to temporarily shut its 850 department stores, upending its turnaround plans, according to people familiar with the matter.

The Plano, Texas-based company has access to enough cash to survive in the months ahead, even as revenue dries up because of the store closures, the sources said. Still, the company is contemplating a bankruptcy filing as one way to rework its unsustainable finances and save money on looming debt payments, which include significant annual interest expenses, the sources added.

Concerns about prolonged store closures and customers remaining sparse even when outlets eventually reopen have also factored into J.C. Penney's deliberations, some of the sources said.

J.C. Penney has not made any final decisions on how to address its strained finances, the sources said. The retailer is also considering asking creditors for breathing room through transactions that would rework debt outside of bankruptcy court proceedings, the sources added. There is also a possibility that J.C. Penney will be able to secure rescue financing, one of the sources said.

The sources spoke on the condition of anonymity to discuss confidential deliberations.

J.C. Penney "has been engaged in discussions with its lenders since mid-2019 to evaluate options to strengthen its balance sheet and maximize its financial flexibility, a process that has become even more important as our stores have also closed due to the pandemic," a company spokeswoman said in a statement.

The pandemic "has created unprecedented challenges," she said, adding the company remains focused on its turnaround plan and looks forward to reopening stores.