Will JC Penney Find A Buyer In Bankruptcy? Private Equity Firm Shows Interest

JC Penney could reportedly have found itself a buyer to help it emerge from bankruptcy if it is unable to reach an agreement with its creditors to reduce its nearly $5 billion debt load.

Private equity firm Sycamore Partners is in talks with the bankrupt retailer to acquire the company after it filed for Chapter 11 in May, sources told CNBC. The sources said that Sycamore is looking to either outright acquire JC Penney or make an investment in the company.

Talks of a deal are uncertain at this time, and there is no guarantee they will result in an agreement between the two companies, the sources told the news outlet.

Sycamore Partners is not the only company that has shown interest in purchasing JC Penney as e-commerce giant Amazon was reportedly in talks with the retailer after it filed for Chapter 11. JC Penney has also been in contact with its landlords, Brookfield Asset Management and Simon Property Group, about teaming up to buy the department store company, sources told CNBC.

Since filing for bankruptcy protection, JC Penney announced that it would be closing 242 stores, with the first 154 locations set to close in the coming weeks. The company is using a phased approach to the liquidation and will close the remaining stores in a second wave.

JC Penney was forced to close all of its more than 800 stores because of the coronavirus pandemic. The company then furloughed the majority of its staff and has since started reopening locations as local orders allow.

Sycamore Partners is the same investment firm that was looking to close a deal with L Brands for the purchase of Victoria’s Secret but pulled out as the coronavirus took hold and forced the lingerie brand to close all of its stores. L Brands and Sycamore Partners eventually came to a deal to dissolve the agreement and forego the sale of struggling Victoria’s Secret.