J.C. Penney moves to close 144 stores as progress on sale grinds slowly

Vendors are holding back product as they wait for a deal to sell the bankrupt chain to landlords to materialize. This story includes corrected information.

What happened

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Why it matters

J.C. Penney continues to shrink as it tries to beat a path out of bankruptcy. The retailer is in Chapter 11 in part because of perpetual sales declines and profit losses, a sign that the company was outsized relative to a diminished customer base.

Whether Simon and Brookfield see a potentially profitable venture in Penney alone or whether they trying to protect their malls from the full liquidation of a major anchor retailer is an open question. But there is more at risk, as many separate stakeholders all pointed out in this week's hearing. Namely, there is a business more than a century old that supports tens of thousands of jobs in the country.

The deal still needs to be signed, approved and completed for those jobs to be saved, which — as the progress of Penney's Chapter 11 case has shown — is easier said than done. A month has passed since Joshua Sussberg of Kirkland & Ellis, one of the retailer's bankruptcy attorneys, announced in a court hearing that Simon and Brookfield has agreed in principle to buying Penney's operations, in a deal that would also spin off some of its owned property into a separate venture to be taken over by secured lenders. But no formal asset purchase agreement has been filed, as talks continue in the background, and stakeholders across the board sound the alarms about the time it is taking.

This news brief is based on reporting published by Retail Dive on 2020-10-09. The original report is linked below.