J.C. Penney Appears to Have Been Saved
Two groups have come together and will apparently save the day for lovers of J.C. Penney, the 118-year-old retailer.
Brookfield Property Partners and Simon Property Group, both mall owners, have a tentative deal to purchase the company out of bankruptcy. It would rescue the retailer which was originally founded by James Cash Penney in 1902.
As part of its bankruptcy filing in May, J.C. Penney revealed plans to close around thirty percent of their stores, which would take it from nearly 850 locations to a little over 600.
Josh Sussberg, a lawyer for J.C. Penney, announced in bankruptcy court that the sale would save approximately 70,000 jobs and that J.C. Penney would have $1 billion in cash when the sale is done. When complete, J.C. Penney would have a total value of $1.75 billion, according to Sussberg who said, "We are all committed to moving this quickly and saving J.C. Penney."
According to WQAD, it's the second major purchase announced by Simon Property Group in the last month. In August, Simon and Authentic Brands Group partnered to unveil plans to purchase Brooks Brothers, a clothing company that's been around even longer than J.C. Penney. Brooks Brothers, the oldest clothing retailer in the U.S., first opened in New York on April 7, 1818. The Brooks Brothers price tag was $325 million.
Why are malls buying their tenants? Without them, they're in real trouble. With them, they hope to save their malls from more stores leaving and with them... even more customers.