JC Penney Store in Laguna Hills, California
Scottas Mlyn | CNBC
The liquidation of bankrupt JC Penney is “not on the cards,” says a lawyer in the department store chain.
Penney is moving forward on the sale, which is expected to be completed by this fall, lawyer Joshua Sussberg of Kirkland & Ellis said at a court hearing on Wednesday afternoon.
“I want to say unequivocally that we have not had a single discussion about liquidation,”; Sussberg said of Penney’s restructuring process. “It’s just not on the cards.”
Sussberg noted a report earlier in the weekly newspaper New York Post that private equity firm Sycamore intends to make a $ 1.75 billion bid to buy the 118-year-old department store chain and merge it with rival Belk.
He called the story “ill-informed” and said Sycamore’s plans to merge Penney with Belk were “completely untrue”.
Sycamore declined to comment.
Snesberg said three separate offers to buy Penney real estate and other property are under consideration. He declined to name the bidders, saying the bids were confidential.
Penney filed for Chapter 11 bankruptcy protection on May 15, Weighed Debt, and the demolition of the coronavirus pandemic.
Earlier this month, the company announced it would lay off about 1,000 workers as it moved forward by closing about 150 locations across the United States. The retailer made the request, but there were still about 860 stores in operation.
Penney said Wednesday that since the Covid-19 crisis was temporarily closed, all stores have reopened.
He said its non-supermarket outlets, of which 173 have, continue to perform better than the outlet stores, of which 520 have. Non-supermarket sales have been down about 26% and Penney supermarkets have been down about 33% since they opened.
According to Sussberg, the department store chain continues to negotiate with its owners for better rents, which allows the company to cut costs.
According to S&P Global Market Intelligence, in 2020 Forty retailers, including Penney, filed for bankruptcy. The list is expected to continue to grow.
Many have already fought the Covid-19 crisis, hitting the U.S. economy, forcing them to sell unnecessary shops and malls. The pressure has only intensified as the industry is already undergoing seismic changes in consumer behavior and shopping is a priority. The dominance of department stores in retail has declined.
According to Sussberg, Penney aims to reach a “mass consensus” on his future strategy by next month.