JCPenney says he hopes to come out of bankruptcy by Christmas


JC Penney believes he will come out of Chapter 11 bankruptcy before Christmas, under a proposed property deal that would save tens of thousands of jobs.

The besieged century-old retailer said on Wednesday it had filed a draft purchase contract with the country’s two largest mall owners. Substantially all of JC Penney’s business and operating assets will be acquired by Brookfield Asset Management and Simon Property Group through a combination of cash and new borrowings.

Details of the $ 800,000 million deal that will save an estimated 70,000 jobs and avoid total liquidation first emerged last month during a bankruptcy hearing. During the hearing, a lawyer representing JC Penney said Simon and Brookfield would spend $ 300 million on the acquisition and then incur another $ 500 million debt on behalf of the retailer.

The deal goes to a Texas bankruptcy judge on Monday.

If the JC Penney deal is approved, the company would be the last brand to be owned by Simon Property. Earlier this year, Simon Property purchased men’s clothing Brooks Brothers, fast fashion retailer Forever 21 and jeans store Lucky mark. Simon Property owns most of the shopping centers where these stores are located.

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JC Penney – who even before the Coronavirus pandemic has struggled to compete with Amazon, Target and Walmart – has grown into one of the largest retailers in file for chapter 11 bankruptcy this year in the middle a wave of store closures forced by the spread of COVID-19 infections. Around $ 4 billion in debt is hanging over JC Penney, and the company has closed many stores in recent years in an effort to cut costs.

In its most recent quarter, JC Penney’s sales fell nearly 8% to $ 3.4 billion from the same period a year ago. Income was $ 27 million, up from $ 75 million a year ago. The company missed two debt payments, one in April and one in May, which many analysts saw as a harbinger of bankruptcy.

CEO Jill Soltau said in May that bankruptcy “is the best way to ensure that JCPenney will build on its more than 100 year history to serve our customers for decades to come.” The Texas-based retailer will cut nearly a third of its stores over the next two years during its restructuring, leaving just 600 locations open.

More than two dozen retailers have filed for bankruptcy since the pandemic, including restaurants, gyms and other businesses. Neiman Marcus, J Crew, Hertz, Ruby Tuesday and The Gold Gym all blamed their financial problems on the pandemic. Lord & Taylor ended a legacy almost 200 years later bankruptcy in August.

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