When the average person is tight on cash, they go to the pawn shop and get a couple bills for whatever they don’t need for the next month. When a retailer finds itself in the same situation, the options left to it are a little more drastic.
JC Penney announced Friday (Feb. 5) that it had officially begun a sale of its headquarter campus located in Plano, Texas. CEO Marvin Ellison explained that the sale of the 650,000 square-foot, three-story complex, which the company has occupied since its construction in 1992, should help JC Penney as it moves forward with debt restructuring and other efforts.
“With the tremendous growth and development currently taking place within Plano and North Texas, there’s no better time to take advantage of this lucrative market by pursuing a sale of our home office real estate,” Ellison said in a statement. “Even as we continue to deliver positive financial results across all aspects of our business, including delivering year-over-year gross margin increase in the fourth quarter, this presents an ideal opportunity to reduce outstanding debt and create long-term savings for the company.”
Even if JC Penney can find a buyer who is willing to pay top dollar for the office complex, it might be just a drop in the bucket compared to the financial hole it finds itself in. Fortune explained that a disastrous rebranding effort in 2012 led to a 30 percent falloff in annual sales, and the cash shortfall has steadily contributed to the $5.2 billion in long-term debt JC Penney now holds. The offices have also been stripped of many employees over the years, with only half remaining from those working at the Plano headquarters in 2012.
Rather than taking the sale all at once, JC Penney officials will attempt to lease parts of the complex where they can, scaling back their own operations as necessary and hoping that they didn’t just invite a weird new roommate in.