J.C. Penney is one step closer to exiting bankruptcy later month after announcing a new ownership in a deal that, at least in the short term, will save tens of thousands of jobs.
A Texas judge on Monday cleared Simon Property Group and Brookfield Asset Management — the nation’s largest mall owners — to buy the ailing retailer for $1.75 billion. Lawyers representing J.C. Penney told CBS MoneyWatch the acquisition will preserve roughly 60,000 jobs that would’ve been lost if the company had liquidated. They did not say how many stores will be saved as a result of the deal.
“Our goal from the beginning of this process has been to ensure J.C. Penney will continue to serve customers for decades to come and this court approval accomplishes that objective,” CEO Jill Soltau said in a statement.
Under J.C. Penney’s new structure, the company is split into two entities. Simon and Brookfield own the retail and operations assets, while J.C. Penney’s creditors control the company’s distribution centers and other real estate holdings.
J.C. Penney had 85,000 workers and more than 800 stores when itin May. Weighed down by some $4 billion in debt, the more than 100-year-old company has closed numerous brick-and-mortar locations in recent years amid the growth of online shopping.
This year, J.C. Penney has closed seven stores and plans to close 153 in total, according to a government filing. The Texas company will shed nearly a third of its stores in the next two years as it restructures, leaving just 600 locations open.
Exiting bankruptcy puts the department store in “a strong position to build on J.C. Penney’s long track record of taking care of our associates, customers, vendor partners and communities,” Soltau said.
The Plano, Texas, chain will shed nearly a third of its stores in the next two years as it restructures, leaving just 600 locations open. Its financing agreement expires on Nov. 16 and the sale had to close by Nov. 20 to avoid the company going out of business.
Simon Property has rolled up several retailers this year that operate in its malls, including men’s clothier Brooks Brothers, fast-fashion seller Forever 21 and denim store Lucky Brand.
More than two dozen retailers have filed for bankruptcy during the coronavirus pandemic, including Neiman Marcus, J. Crew and Lord & Taylor.
The Associated Press contributed to this report.