Sycamore Partners Seeks To Buy JCPenney For $1.75B

Sycamore Partners is reportedly seeking to buy JCPenney for US$1.75 billion and intends to combine the iconic retailer with the Belk department store chain, the New York Post reported, citing an unnamed source.

The private equity firm, which is the owner of Belk, Staples, The Limited, and Talbots, seems set to be victorious in the auction to purchase JCPenney, the newspaper reported

Brookfield Property Partners and Simon Property Group have also joined forces for a US$1.65 billion offer, while Hudson’s Bay Company has created a US$1.7 billion offer.

Syacamore, for its part, views JCPenney as a way to help revitalize the 300-store Belk chain. “JCP is the lifeboat for Belk, which wants to compete with Macy’s nationally,” an unnamed source told the Post.

Belk, which Sycamore acquired in 2015, and JCPenney have grappled with decreasing sales as they face rivalry from eCommerce merchants and newer brands. At the time it sought bankruptcy, JCPenney also had the burden of US$5 billion in debt.

The Sycamore roadmap entails having 250 JCPenney retail locations take on the Belk branding in some markets. The remainder of JCPenney stores would face liquidation, according to an unnamed source in the Post report.

According to unnamed sources in the report, Syacamore has held the lead position for the deal to buy JCPenney. However, the arrangement requires the green light from the courts as well as other parties.

While one unnamed source told the outlet that the bidders were informed that “Belk/Sycamore submitted the strongest bid to acquire JCP,” another source indicated that each of the bidders were still contenders.

The news comes as JCPenney said on May 15 that it would file for Chapter 11. That announcement came as the retailer arrived at an agreement with 70% percent of its lenders in addition to a debt restructuring.

In June, the retailer identified the inaugural round of 154 retail store closures following an evaluation of its location footprint and assessment of  “future strategic fit” in addition to performance.

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