Bankrupt department store chain operator J.C. Penney has set the record straight and denied that it was in the process of liquidation. The company's attorney said in an interview that liquidation was "not in the cards" and J.C. Penney was pushing forward with its plans to sell the business.
During a court hearing held on Wednesday, J.C. Penney's attorney, Joshua Sussberg of Kirkland & Ellis, stated that the company was moving forward with its planned sale, which he expects should be completed by this fall. Sussberg shot down rumors of a potential liquidation, stating that such a process is not being discussed within the company as part of its restructuring process.
Sussberg's statement was in response to a report published by the New York Post earlier in the week claiming that J.C. Penney was in talks with private-equity firm Sycamore for a possible merger. The report claimed that Sycamore had offered $1.75 billion to purchase the 118-year-old company and merge it with its rival Belk Inc. Sussberg called the report "ill-informed" and clarified that J.C. Penney was adamant in keeping the brand and for the company to operate its own stores.
During the hearing, Sussberg revealed that J.C. Penney was in talks with three separate bidders for some of its real estate and other assets. The bidders included Sycamore, Simon Property Group, Brookfield Property Partners, and Hudson's Bay Co. The details of the bids and the properties and assets involved were not disclosed and it reportedly is being kept confidential.
J.C. Penney originally filed for Chapter 11 Bankruptcy Protection on May 15. One of the oldest department store chain operators in the country finally threw in the towel after its business had all but halted to a standstill due to the coronavirus pandemic. Its mounting debt and inability to meet its financial obligations also contributed to the decision.
Earlier this month, J.C. Penney announced that it will be shutting down around 150 of its outlets across the United States. This will also result in the laying off of more than 1,000 of its employees. While it is in bankruptcy, the company plans to continue operating some of its outlets. As of Wednesday, all of the company's existing stores have since reopened. J.C. Penney is currently negotiating with its creditors and its landlords for potential deals.
The company stated that its 173 reopened off-mall locations are performing better than its 520 outlets inside shopping centers. It reported that sales of its off-mall stores have declined by about 26 percent, better than the 33 percent decline of its in-mall outlets.
