J.C. Penney has been saved. Now what?

Retailer may continue to face challenges moving forward

National /
Dec.December 07, 2020 02:00 PM
 J.C. Penney (iStock)

J.C. Penney (iStock)

J.C. Penney has been rescued from bankruptcy, but challenges remain for the beleaguered retailer.

The department store chain completed the sale of its retail operations to Simon Property Group and Brookfield Asset Management on Monday, Bloomberg News reported. J.C. Penney will essentially be split into two: an operations firm led by Simon and Brookfield, and a property one that its lenders will control. The former is now out of Chapter 11 bankruptcy, while the latter will not be fully organized until next year, according to Bloomberg.

While the retailer was hit hard by the pandemic, its issues predate the Covid-19 outbreak — namely debt, as well as a decline in sales as shoppers turned to other stores and e-commerce.

Still, with one of those issues gone, there may be some hope for a renewed J.C. Penney.

“The brand still has value and Soltau’s initiatives are on the mark to improve results,” said Poonam Goyal, who follows the retail industry for Bloomberg Intelligence. “Debt was its biggest issue, so if it can start with a clean slate, the retailer can find ways to reclaim itself.”

The agreement is also helpful for Simon and Brookfield, both of whom have experienced issues at their malls as other retailers close or declare bankruptcy.

“They basically got a low-cost option on what they can do with all those JCPenney properties,” Jan Rogers Kniffen, a former department store executive and founder of the consulting firm that bears his name, told Bloomberg. “If you’re in that mall, you’re certainly better off with JCPenney operating than with a dark box.”

[Bloomberg News] — Sasha Jones


Related Articles

arrow_forward_ios
Fuse Group CEO Eyal Peretz and Metronomic's Ricky Trinidad with 3364 Oak Avenue (Photo via Google Maps; Fuse; Metronomic)
Bankruptcy judge paves way for Metronomic property auction
Bankruptcy judge paves way for Metronomic property auction
CMX emerges from bankruptcy after filing in April (Getty, Wheeling Town Center)
Encore: CMX Cinemas parent emerges from bankruptcy
Encore: CMX Cinemas parent emerges from bankruptcy
Brian Kingston and Merrick Park
Here’s what tenants are paying at Shops at Merrick Park
Here’s what tenants are paying at Shops at Merrick Park
Josh Zegen of Madison Realty Capital and 777 North Ocean Drive, Hollywood (Google Maps)
Madison Realty closes on Costa Hollywood Beach condos for $43M
Madison Realty closes on Costa Hollywood Beach condos for $43M
Kelly Beam, Ricky Trinidad , and 3265 Bird Avenue (Credit: Google Maps)
Miami developer Metronomic files for bankruptcy
Miami developer Metronomic files for bankruptcy
Founder and CEO of IT'SUGAR Jeff Rubin, and BBX CEO Alan Levan (Credit: Denise Truscello/Getty Images)
It’Sugar files for bankruptcy protection after sales sour
It’Sugar files for bankruptcy protection after sales sour
A Toojay's Deli location (Google Maps)
Lender acquires TooJay’s out of bankruptcy
Lender acquires TooJay’s out of bankruptcy
777 North Ocean Drive, Hollywood (Credit: Google Maps)
Bankruptcy judge approves Madison Realty’s purchase of Costa Hollywood Beach condos
Bankruptcy judge approves Madison Realty’s purchase of Costa Hollywood Beach condos
arrow_forward_ios

The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

Loading...