JCPenney has completed its previously announced sale to mall operators Simon Property Group and Brookfield Asset Management, which have acquired substantially all of JCPenney’s retail and operating assets. The retailer filed for Chapter 11 bankruptcy protection in May 2020, with plans to close 242 stores during the restructuring process, including 192 in fiscal 2020 (ending Jan. 30, 2021).
In addition, on Nov. 24, the court approved the company’s Plan of Reorganization to create separate property holding companies (“PropCos”) comprising 160 of the company’s real estate assets and all of its owned distribution centers. These will be owned by the company’s debtor-in-possession(DIP) and first lien lenders. JCPenney will continue to operate the properties and distribution centers moved into the PropCos, which are expected to complete the restructuring process and emerge from Chapter 11 bankruptcy protection in the first half of 2021.
“Today is an exciting day for our company, as we have accomplished our goal of putting JCPenney on a secure path for the future as a private company so that we can continue to serve our loyal customers,” said Jill Soltau, CEO of JCPenney in a statement. “With this closing, our operating company has exited Chapter 11 and is continuing under new ownership and the JCPenney banner.”
“We are excited to help lead the turnaround of a storied institution while saving tens of thousands of jobs and continuing to serve over 35 million customers,” said Brian Kingston, CEO of Real Estate at Brookfield Asset Management in a statement. “This is exactly the type of investment our Retail Revitalization Program was designed to make, and along with our partner Simon, we have a successful blueprint in place to deploy our collective operational expertise and industry relationships to transform JCPenney through new innovations and offerings.”