JC Penney exits bankruptcy in deal that saves 60,000 jobs

JC Penney came out of bankruptcy this week under a new owner 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 shopping center owners – to buy the ailing retailer for $ 1.75 billion. Lawyers representing JC Penney told CBS MoneyWatch that the acquisition would preserve about 60,000 jobs that would have been lost had the company gone into liquidation. They did not say how many stores would be saved by the deal.

“Our goal from the start of this process has been to ensure that JC Penney will continue to serve clients for decades to come and that court approval achieves that goal,” CEO Jill Soltau said in a statement.

Under the new structure of JC Penney, the company is split into two entities. Simon and Brookfield own the retail and operating assets, while JC Penney’s creditors control the company’s distribution centers and other real estate assets.

JC Penney had 85,000 workers and more than 800 stores when it filed for bankruptcy in May. Burdened with approximately $ 4 billion in debt, the more than 100-year-old company has closed many physical stores in recent years amid growing online shopping.

This year, JC Penney has closed seven stores and plans to close 153 in total, according to a government file. The Texas-based company will cut nearly a third of its stores over the next two years as it restructures, leaving just 600 locations open.

The exit from bankruptcy puts the department store in “a strong position to build on JC Penney’s long history of supporting our associates, customers, supplier partners and communities,” said Soltau.

The Plano chain in Texas will cut nearly a third of its stores over the next two years as it restructures, leaving just 600 locations open.

Simon Property has wound up several retailers this year that operate in its malls, including menswear clothier Brooks Brothers, fast fashion seller Forever 21 and denim store Lucky Brand.

More than two dozen retailers filed for bankruptcy during the coronavirus pandemic, including Neiman Marcus, J. Crew and Lord & Taylor.