MALL OWNERS BUY JCPENNEY OUT OF BANKRUPTCY

Simon Property Group and Brookfield Property Group, two of the U.S.’s largest mall landlords, have agreed to a $1.75-billion purchase of the JCPenney retail chain, which filed Chapter 11 bankruptcy on 16 May.
Authentic Brands, which owns 50 fashion labels including Barneys New York, Nautica, and Nine West, is in discussions to join the deal. The company previously joined Brookfield and Simon to buy Forever 21, a fast-fashion chain that went bust last September.
Authentic Brands is expected to contract with the revived Penney to populate the stores with its fashion brands.
The deal would allow mall owners to keep open a key anchor department store for many of their shopping centers. Simon has 63 Penney stores among its 100-plus malls; Brookfield hosts more than 100 Penney sites in its centers.
Penney owns 32 of the 63 stores it has in Simon malls, with an average value of $16 million each.
“They’re buying the land alone owned by JCPenney at 50 cents on the dollar and getting the retailer’s operations thrown in basically for free,” said analyst Floris van Dijkum at Compass Point Research and Trading who was quoted by the Wall Street Journal.
TREND FORECAST: With the “Greatest Depression” having begun and the “Pall on the Malls” a long-lasting trend, we disagree with the concept that filling the stores with Authentic brands that have cachet and celebrity names attached, such as Shaquille O’Neil and Neil Lane, could replace Penney’s older customer base with a new generation of shoppers.
Their target market does not have the money and with no partying rules in place and getting stricter, dressing up to go out is now out of the question.