JCPenney Reaches Deal to Sell Its Business to Mall Owners Simon and Brookfield

Isabel Garcia
·2 mins read
Photo credit: SOPA Images - Getty Images
Photo credit: SOPA Images - Getty Images

From House Beautiful

On Wednesday evening, JCPenney announced that it has reached an agreement to sell its retail and operating assets to mall operators Simon Property Group and Brookfield Property Partners.

In May, the apparel and home department store chain filed for Chapter 11 bankruptcy after being forced to temporarily close its stores in March due to the coronavirus pandemic. But prior to the ongoing pandemic, JCPenney had been struggling for years.

Overall, the deal values JCPenney at $1.75 billon. The New York Times notes that Simon and Brookfield were thought to be JCPenney's most likely buyers since losing JCPenney stores, many of which are anchor tenants, would be detrimental to their shopping centers.

“We have determined that an agreement with Brookfield and Simon, as well as the formation of separate real estate investment trusts owned by our First Lien Lenders, is the best path forward to maximize value for our stakeholders, ensure we keep the most stores open and associates employed, and position JCPenney to build on our over 100-year history,” JCPenney CEO Jill Soltau said in a statement.

The agreement is expected to save a significant number of jobs. “We are in a position to do exactly what we set out to do at the very beginning of these cases and that is to preserve 70,000 jobs, a tenant for landlords, a vendor partner, and a company that has been around for more than a century,” said Joshua Sussberg, a lawyer at Kirkland & Ellis, which has been representing JCPenney, during a status hearing on Wednesday, the New York Times reports.

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