Bankrupt JC Penney bought by mall operators in need of tenants

NEW YORK - JC Penney reached an agreement to sell its retail business to mall operators Simon Property Group and Brookfield Property Partners on Wednesday , averting a total liquidation that would have had significant ripple effects through the industry and cost tens of thousands of jobs.

It was not immediately clear how many stores the mall operators will keep open or exactly how many jobs they would preserve. The future of the department store chain, which filed for Chapter 11 bankruptcy protection in May, had been unsettled. Liquidation was floated as a possibility as deal talks stalled this month.

JC Penney's creditors had clashed with Simon and Brookfield over the value of the retail business and the rights to redevelop mall space, the people said. If the creditors lost redevelopment rights, any real estate business that was carved out would be less valuable. The company had until Thursday to strike a deal with creditors, find a buyer or opt to liquidate.

Many malls have already lost one or two department stores in recent years and are likely to struggle to find potential replacements as the pandemic persists. At the same time, chains like Victoria's Secret and Gap are looking for ways to cut back on the number of their stores.

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