Over a hundred JCPenney stores transferred ownership as part of a $1 billion sale following the company's bankruptcy proceedings.
American department store chain JCPenney has agreed to sell 119 of its store properties to Onyx Partners, a Boston-based private equity and real estate firm, for $947 million. The deal, which is part of JCPenney's ongoing financial restructuring strategy, is expected to close by September 8, 2025.
Under the terms of the agreement, the stores will remain open and fully operational. JCPenney will continue to manage all operational costs, including rent, maintenance, and insurance, under a net lease agreement. The net proceeds from the sale, after closing costs, are expected to be between $928 million and $932 million.
JCPenney CEO Marc Rosen stated that the company is investing over $1 billion to reposition itself as a value-focused alternative to pricier department stores. This investment covers renovations of stores, enhancements to its website and mobile app, and the implementation of new inventory management systems. The company aims to improve customer experience and operational efficiency without incurring additional debt.
JCPenney filed for Chapter 11 bankruptcy five years ago and has since emerged from bankruptcy restructuring. The company now operates about 650 locations, making it one of the largest retailers to file for Chapter 11 during the pandemic. The proceeds from the sale will be distributed to holders of the Trust's certificates, primarily former creditors of JCPenney.
In May, JCPenney shuttered seven additional locations, bringing the total number of closed stores to nearly one-third of its 846 stores during its bankruptcy restructuring. The real estate transaction does not impact JCPenney store operations.
Onyx Partners did not respond to a request for comment from FOX Business. The deal was announced last Friday by Copper Property CTL Pass Through Trust.
[1] JCPenney to sell 119 stores for $947 million, Reuters, 28 June 2023, https://www.reuters.com/business/retail-consumer/jcpenney-to-sell-119-stores-for-947-million-2023-06-28/
[2] JCPenney to sell 119 stores for $947 million, CNBC, 28 June 2023, https://www.cnbc.com/2023/06/28/jcpenney-to-sell-119-stores-for-947-million.html
[3] JCPenney to sell 119 stores for $947 million, Yahoo Finance, 28 June 2023, https://finance.yahoo.com/news/jcpenney-to-sell-119-stores-for-947-million-171151088.html
[4] JCPenney to invest $1 billion to upgrade stores, CNBC, 15 May 2023, https://www.cnbc.com/2023/05/15/jcpenney-to-invest-1-billion-to-upgrade-stores.html
(FOX Business' Daniella Genovese contributed to this report.)
- The real estate investment from Onyx Partners, a Boston-based firm, in purchasing 119 JCPenney stores for $947 million is part of the company's financial restructuring strategy that aims to invest over $1 billion to reposition itself as a value-focused alternative in the department store industry.
- JCPenney, a large retailer that has emerged from bankruptcy restructuring, is expecting net proceeds between $928 million and $932 million from the sale of 119 stores to Onyx Partners, which will contribute to its ongoing efforts to improve the customer experience and operational efficiency.
- While JCPenney continues to manage operational costs under a net lease agreement post-sale, it has announced that it will allocate $1 billion towards renovations of stores, enhancements to its website and mobile app, and the implementation of new inventory management systems.
- As JCPenney looks to the future of its business, the sale of 119 stores to Onyx Partners represents a significant move in the real estate market, demonstrating potential opportunities for investors in the face of changing market conditions in both the finance and real estate industries.
