On Monday, the 118-year-old company announced the sale of its retail and operating assets to the two companies has been finalized. Under the agreement, the company will operate under new ownership while still using the JCPenney banner.
|SPG||SIMON PROPERTY GROUP, INC.||144.53||+4.31||+3.07%|
In November, the U.S. Bankruptcy Court for the Southern District of Texas approved a purchase agreement in which substantially all of JCPenney’s retail and operating assets would be acquired by its two largest landlords and its primary lenders through a combination of cash and new-term loan debt.
As part of the deal, the property holding companies will own 160 of JCPenney's real estate assets and all of its owned distribution centers as part of a separate property holding company.
In May, the company became one of the largest retailers to file for protection in bankruptcy court amid a wave of store closures forced by the spread of COVID-19 infections in the U.S.
"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,” the retailer's CEO Jill Soltau said in a statement, adding this would "not be possible without the commitment and hard work of our associates and the support of our vendor partners."
The company plans to permanently close nearly a third of its 846 stores as part of its restructuring over the next two years, which would leave it with just over 600 locations. Bankruptcy lawyer Joshua Sussberg of Kirkland & Ellis said at a hearing in September that the rescue deal would save roughly 70,000 jobs.
Although Soltau said Monday marked a major "milestone" for the company, the retailer still has to figure out how to compete with major retailers such as Amazon and Walmart to attract shoppers during the holiday season.
FOX Business' Lucas Manfredi contributed to this report.