JCPenney to sell 119 stores for $947 million to settle debts, including three in New York

In a significant move, about 119 JCPenney stores are set to be acquired by a Boston private equity firm for a substantial amount of nearly $1 billion, marking a pivotal development in the retail industry. This transaction comes amid the aftermath of JCPenney’s bankruptcy filing, which took place approximately five years ago.

The announcement of the all-cash sale of these 119 JCPenney properties to an affiliate of Onyx Partners, Ltd. was made by Copper Property CTL Pass Through Trust on July 25. The closing of this deal for the net-lease stores, which are responsible for paying rent and operating expenses, is anticipated to take place on September 8. This sale was facilitated by property management firm Newmark and Hilco Real Estate, who were tasked with finding suitable buyers for these JCPenney locations on behalf of Copper Property, a trust formed by the lenders involved in JCPenney’s reorganization post-bankruptcy in 2020.

Following the bankruptcy, Copper Property assumed control of approximately 160 JCPenney locations and six distribution centers. Simon Property Group and Brookfield Asset Management Inc. took over the operation of the remaining JCPenney stores. It’s important to note that prior to these developments, JCPenney, with around 650 stores to its name, found itself in a dire financial situation, leading to the significant decision to file for Chapter 11 bankruptcy protection, making it one of the major retailers to do so.

The substantial proceeds from the impending transaction will primarily be directed towards JCPenney’s creditors, with an estimated distribution of between $928 million and $932 million, with considerations for closing costs. Larry Finger, principal financial officer, shed light on these financial details during a conference call held on July 28 to discuss the impending transaction.

As for the fate of the 119 stores that are part of the deal, it is worth noting that all these locations are currently operational. Despite efforts to obtain a comment from the buyer, Onyx Partners, there has been no response to requests for comments on this matter. The sale of these JCPenney stores marks a significant development in the retail landscape, further underscoring the evolving nature of the industry and the strategies being employed by various entities to navigate through the complex challenges and opportunities presented in the current business landscape.