JCPenney Sells 119 Stores in $947 Million Deal Set to Close Soon

PLANO, Texas — JCPenney is selling 119 of its stores across the United States in a deal worth $947 million. This significant transaction, announced last week, is expected to close by September 8.

The buyer, Copper Property CTL Pass Through Trust, has completed due diligence, making its deposit non-refundable. This sale follows JCPenney’s Chapter 11 bankruptcy filing in May 2020 during the COVID-19 pandemic, which resulted in the closure of nearly one-third of its stores.

“The transaction announced yesterday represents a change in landlord but does not impact JCPenney store operations,” the company stated. JCPenney confirmed that all stores involved in the sale will continue to operate for customers.

JCPenney, which now runs about 650 stores, initially transferred ownership of 160 properties to a trust formed for its secured lenders during its restructuring.

The deal includes stores from 35 states, with a significant number located in Texas and California. Five stores in Ohio and two in Kentucky are among those being sold. The proceeds from this sale will be funneled to the trust’s certificate holders, primarily benefiting creditors from the bankruptcy.

According to Larry Finger, the former Principal Financial Officer of Copper Property Trust, an estimated $928 million to $932 million will be distributed to creditors post-closing costs.

Despite the sale, JCPenney CEO Marc Rosen noted that the company is investing over $1 billion to revitalize its brand and attract shoppers. Rosen emphasized that JCPenney aims to position itself as a value-friendly alternative to other department stores.

The trust’s sales are part of an exhaustive marketing process managed by commercial real estate firm Newmark. Onyx Partners, the private equity firm acquiring the stores, has not commented on the sale.