New York (CNN Business)Mall owners Simon Property Group and Brookfield Property Group have an agreement to buy JCPenney out of bankruptcy, the companies said Wednesday.
Simon and Brookfield intend to acquire “substantially all of JCPenney’s retail and operating assets” for $1.75 billion with a combination of cash and debt, the companies said.JCPenney, the 118-year-old department store chain which filed for bankruptcy in May, has been struggling for years. It hasn’t had a profitable year since 2010. It has been closing stores at a rapid pace and struggling with unaffordable debt levels. At the time of the bankruptcy filing, it had more than 800 stores.Chains like JCPenney, which are dependent on clothing sales, have been hit particularly hard during this pandemic, as millions have lost their jobs and millions more are working from home and don’t need dress clothes. Photos: The history of JCPenney Photos: The history of JCPenneyPeople walk past a JCPenney store at the Queens Center Mall in New York in 2016.Hide Caption 1 of 21 Photos: The history of JCPenneyBusinessman James Cash Penney points to a picture of his first store in Kemmerer, Wyoming. JCPenney started in 1902 as a dry-goods store called the Golden Rule Store. At the time, Penney’s business practices were revolutionary. He banned haggling, a common practice at the time, to keep prices low. And he encouraged his employees to “serve the public to its ultimate satisfaction.” The company changed its name a decade later, opened many more stores and went public in 1929.Hide Caption 2 of 21 Photos: The history of JCPenneyIn 1951, the company had $1 billion in sales for the first time.Hide Caption 3 of 21 Photos: The history of JCPenneyConstruction workers build a JCPenney store in Denver in 1956.Hide Caption 4 of 21 Photos: The history of JCPenneyA couple of store managers, George F. McDougall and Graham Vaughn, confer at a Denver location in 1963.Hide Caption 5 of 21 Photos: The history of JCPenneyShoppers hurry across an intersection in front of a JCPenney store in Denver in 1964.Hide Caption 6 of 21 Photos: The history of JCPenneyRussell Martin, a store manager in Denver, shows a sword to a couple that won it as a special promotion in 1968.Hide Caption 7 of 21 Photos: The history of JCPenneyA JCPenney store is seen in Quincy, Illinois, in 1969. JCPenney reached its peak number of stores in 1973, when it operated just over 2,000 locations nationwide.Hide Caption 8 of 21 Photos: The history of JCPenneyA woman does a double take after seeing what she thought was a mannequin move in a JCPenney window in 1972.Hide Caption 9 of 21 Photos: The history of JCPenneyA JCPenney exchange desk is busy on the day after Christmas in 1980.Hide Caption 10 of 21 Photos: The history of JCPenneyBritain’s Prince Charles and Princess Diana visit a JCPenney store in Springfield, Virginia, during a trip to the United States in 1985.Hide Caption 11 of 21 Photos: The history of JCPenneyDominique Key, left, and Lesley Ann Pont shop for shoes at a JCPenney store in Thousand Oaks, California, in 1996.Hide Caption 12 of 21 Photos: The history of JCPenneyCustomers shop at a new JCPenney store in New York in 2009.Hide Caption 13 of 21 Photos: The history of JCPenneyA customer goes down an escalator at a JCPenney store in Westminster, Colorado, in 2009.Hide Caption 14 of 21 Photos: The history of JCPenneyGabbie Juka, left, and Allison Funk share a laugh as they relax on a bed at a JCPenney store in Mentor, Ohio, in 2010.Hide Caption 15 of 21 Photos: The history of JCPenneyCustomers walk past mannequins at a JCPenney store in New York in 2013.Hide Caption 16 of 21 Photos: The history of JCPenneyCustomers shop inside a JCPenney store in Glendale, California, in 2013.Hide Caption 17 of 21 Photos: The history of JCPenneyMannequins of different shapes and sizes are displayed in a store window in New York in 2014.Hide Caption 18 of 21 Photos: The history of JCPenneyJCPenney shoppers view discount merchandise in Bloomsburg, Pennsylvania, in 2017. Since the fall of 2011, the company has reported only five profitable quarters -— all of them in the holiday shopping season.Hide Caption 19 of 21 Photos: The history of JCPenneyJCPenney CEO Jill Soltau speaks during an interview in Fort Worth, Texas, in 2019. The company has had four different CEOs in the past 10 years.Hide Caption 20 of 21 Photos: The history of JCPenneyParking lots are empty in front of a JCPenney store in Hayward, California, in March 2020. Stores were closed because of the coronavirus pandemic.Hide Caption 21 of 21It would make sense for Simon and Brookfield to help keep JCPenney alive for now, some experts say. Traditional malls were facing problems from store closings and reduced foot traffic even before the pandemic. A record 9,300 stores closed last year, and closings could nearly triple to 25,000 in 2020. In February, Macy’s (M) — another mall anchor — announced plans to close an additional 125 stores over the next three years.Read MoreMalls can’t lose yet another tenant, and Simon was part of the group that bought Forever 21 as part of that retailer’s bankruptcy process just before the pandemic hit US retailing.Despite mall owners’ desires to keep retailers alive, even if only on life support, it’s by no means certain that JCPenney will survive this crisis. Pier 1, which filed for bankruptcy with the intention of staying in business, is now in the process of closing all its stores and going out of business.