In its heady days, the 120-year-old department store chain J.C. Penney used to be the go-to place for consumers looking for low-cost drapes, mattresses, and tableware, as well as work and leisure clothing.
The Plano, Texas, retailer served the price conscious consumer part of America's middle class families. Over the years, J.C. Penney expanded and ran 850 stores across the United States and Puerto Rico.
The company however began to struggle with the transition to online shopping in the 2000s and couldn't keep up with shifting consumer trends coupled with lack of steady leadership at the top.
Eventually the coronavirus pandemic compelled the retailer to file for bankruptcy and the company entered a financial restructuring.
"The coronavirus (COVID-19) pandemic has created unprecedented challenges for our families, our loved ones, our communities, and our country. As a result, the American retail industry has experienced a profoundly different new reality, requiring JCPenney to make difficult decisions in running our business to protect the safety of our associates and customers and the future of our company," said J.C. Penney Chief Executive Jill Soltau in a statement.
But the company didn't go out of business as mall companies Simon Property Group and Brookfield Property Partners purchased its retail and operating assets at the end of 2020.
While the sister company of Forever 21 is still not entirely out of the woods, it has taken steps to become more efficient and relevant. The company closed 200 stores, paid down its debt and is left with 650 stores across the country.
The new J.C. Penney owners last year appointed Walmart (WMT) and Levi's (LEVI) veteran Marc Rosen as CEO. Rosen said he was, "eager to propel the business into its next era and connect with our customers in new ways.”
The legacy retailer last month released a brand campaign with the tagline, "Shopping is back!" starring TV and film comedian and “Saturday Night Live” cast member Melissa Villaseñor.
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Fresh Start
In the words of J.C. Penney Founder James Cash Penney, “It is always the start that requires the greatest effort.”
The retail chain is indeed trying to make a fresh start and its owners Simon and Brookfield are bidding for Menomonee Falls, Wis.-based rival Kohl's for a deal valued at nearly $9 billion.
Kohl's has designated its finance committee, following the receipt of unsolicited bids, to review its options.
"The committee will lead a robust and intentional process to explore strategic alternatives to maximize value with the assistance of Goldman Sachs," according to a shareholder letter written by Kohl's Board Chair Peter Boneparth.
The deal could potentially add to J.C. Penny's brand portfolio and overall reach said experts.
"As the two chains don’t have a great deal of store overlap, any deal would give Simon and Brookfield [a] presence in many locations that JC Penney doesn’t serve," GlobalData Managing Director Neil Saunders told Retail Dive.
If the transaction is completed, the new company would abandon its plans to roll out beauty retailer Sephora's shop-in-shops inside Kohl’s locations, The New York Post reported. Sephora has had shops in JCPenney stores for more than 15 years.
