J. C. Penney Company Inc. is gearing up for retail’s holiday season following the approval of its sale to two of the country’s biggest mall owners.
The retailer announced late last night following an hours-long sale hearing that a judge in the United States Bankruptcy Court for the Southern District of Texas approved its asset purchase agreement with Brookfield Asset Management Inc. and Simon Property Group, as well as its debtor-in-possession and first lien lenders.
As part of the deal, the commercial real estate behemoths will acquire JCPenney’s retail and operating assets through a combination of cash and new term loan debt.
“Our goal from the beginning of this process has been to ensure JCPenney will continue to serve customers for decades to come, and this court approval accomplishes that objective,” CEO Jill Soltau said in a statement. “With the 2020 holiday season in full swing, we are excited to operate under the new ownership of Brookfield and Simon outside of Chapter 11 and under the JCPenney banner.
The transaction is subject to additional closing conditions and expected to close in late November, when the Black Friday and Cyber Monday shopping extravaganzas are set to take place. (The holiday season is often considered the most important quarter for retailers.) As it heads into the holidays, JCPenney expects to implement its plan for renewal to “offer compelling merchandise, drive traffic, deliver an engaging experience, fuel growth and build a results-minded culture.”
The sale comes nearly six months after the department store chain filed for Chapter 11 protection: Since taking the helm two years ago, Soltau shuttered several underperforming stores and hired new talent in hopes of reviving the struggling business. JCPenney also hired debt restructuring advisers in mid-July as part of its turnaround plan. It experimented with new strategies aimed at returning the company to its glory days, including dipping its toes into the outdoor market, partnering with consignment giants and launching curbside pickup. However, it continued to struggle with plummeting sales, rising digital competition and, more recently, challenges stemming from the coronavirus pandemic.