JCPenney Says Liquidation Plans “Not In The Cards”

Words by Retail Bum

JCPenney Says Liquidation Plans Not In The Cards
JCPenney Says Liquidation Plans Not In The Cards

Bankrupt retailer JCPenney says it has no intent to liquidate its assets and plans to proceed with a sale that should complete by the fall of this year.

“I want to say, unequivocally, we have had not one discussion about a liquidation,” said Joshua Sussberg of Kirkland & Ellis said during a court hearing Wednesday afternoon. “It’s simply not in the cards.” 

Earlier this week, reports emerged that private-equity firm Sycamore was planning to make a $1.75 billion bid to buy the department store chain and merge it with Belk.

“JCP is the lifeboat for Belk, which wants to compete with Macy’s nationally,” an unnamed source told the New York Post.

Some of the other bidders include Hudson’s Bay Company, which offered $1.7 billion and mall operator Simon Property and Brookfield Property, which made a joint offer of $1.65 billion, the Post reported.

Sussberg called the story “ill-informed” and that Sycamore’s plan to merge the retailer with Belk were “completely untrue.”

While Sussberg declined to name the players that have come forward with a bid, he did say that JCPenney was considering three bids at the moment and they’d ensure that the company’s stores remained operational. 

The 118 year-old retailer filed for bankruptcy protection in May as it suffered from store closures due to the coronavirus pandemic and mounting debt. 

While all of the company’s stores are back open now, the company is in the process of laying off 1,000 employees and is shuttering close to 150 of its 860 locations in the U.S.

The company’s 173 off-mall locations are reportedly performing better than the rest of the company’s locations. According to CNBC, sales at JCPenney’s mall locations are down by nearly 33 percent since reopening, whereas sales at its off-mall locations are only down by about 26 percent. 

The company is reportedly renegotiating rents with mall operators to better manage operating costs of its stores that are not performing well.

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