JC Penney’s deal to sell to mall owners continues thereby saving them from bankruptcy.
American department store JC Penney previously filed for bankruptcy amid the pandemic devastating most economies. But last week, mall owner companies want to buy the 118-year-old retailer for $1.75 billion.
Filing for Bankruptcy Protection
In May, JCPenney sought for Chapter 11 bankruptcy protection. The move comes as the company faces years of trouble. As a matter of fact, CNN said that the company failed to reach a profitable year since a decade ago. JCPenney’s situation only worsened when the pandemic came.
Mall owners Simon Property Group and Brookfield Property Group have an agreement to buy JCPenney out of bankruptcy, the companies say https://t.co/p5qcF9me8T
— CNN Business (@CNNBusiness) September 10, 2020
Original plans of selling to the mall owner companies and bankruptcy lenders kept on seeing delays last month, per JCPenney’s lawyers.
However, last week, the deal seemed to resume as announced on a court hearing.
According to the CEO of JCPenney, Jill Soltau, the transaction would “maximize value for our stakeholders.”
Saving from Bankruptcy
Simon Property Group and Brookfield Property Group entered into a deal to purchase the bankrupt JCPenney. The mall owners wanted to gobble up all of the department chain’s assets, including retail and operations, per CNN Business.
Brookfield and Simon would have to shell out $1.75 billion for the deal, including a mix of both cash and debts.
USA Today said that the purchase could rescue 70,000 jobs. Likewise, it could help maintain over 600 stores also.
Mall Owners and Retailer Tenants
Previously, media outlets reported that mall property owners deal with fewer people flocking to malls, even before the health crisis. It comes as tenants struggle and then eventually close.
And JCPenney belonged to those who might part from mall properties, thereby further lessening the number of mall-goers. It only makes sense for Simon and Brookfield to save JCPenney to reduce vacancies among malls. Earlier this year, Simon and other companies acquired Forever 21, which also filed for bankruptcy just before the pandemic.