The glamorous days of the department store are long gone, but a handful of former mall retailers are doing what they can to hang on. Just yesterday, Sparc Group announced that it would acquire JCPenney and merge the store with its other brands, including Eddie Bauer and Brooks Brothers. The merger will create a new company called Catalyst Brands that, as CNN points out, will now "hold significant sway over the future of America’s malls."
RELATED: Nordstrom Is Closing More Stores Despite $6B Deal to Go Private.
JCPenney's troubles began in 2020.
Though department stores have struggled for many years, JCPenney's troubles became serious during the 2020 pandemic. In May of that year, the company filed for bankruptcy after 10 straight years of financial losses that accumulated to $4.5 billion, CNN reported at the time. Analysts attributed the struggles to executive leadership turnover, a failed plan to become more high-end, and consumers moving over to cheaper stores like Walmart and Target.
In Sept. 2020, mall owners Simon Property Group and Brookfield Property Group acquired JCPenney from its bankruptcy for $1.75 billion. However, by 2022, the 123-year-old retailer had closed nearly 200 of its 846 locations across 40 states.
JCPenney is now merging with other former mall mainstays.
The new deal is being facilitated by Sparc, also known as Simon Properties Authentic Retail Concepts, "a strategic partnership between Simon Property Group, Brookfield Corporation, Authentic Brands Group and Shein," reports The Wall Street Journal. JCPenney will merge with Sparc's other stores, Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica, as well as their "exclusive private brands," including Stafford, Arizona, and Liz Claiborne, according to a press release.
The merger will create a new umbrella company called Catalyst Brands, though JCPenney's current CEO, Marc Rosen, will remain at the helm.
"Our relationships with more than 60 million customers and the deep data we have create a compelling consumer value proposition across our brands. We can design a more personalized shopping experience, offer unified loyalty and credit card programs, and ultimately, cross-sell more effectively," Rosen said in the release. "With a clean balance sheet, we’re in great position to move forward."
Catalyst also owns Forever 21, though it is "exploring strategic options" for the brand. It recently sold the U.S. operations of the brand Reebok.
In an email to Best Life, a Catalyst Brands spokesperson said, "At this time, there are no plans to close any JCPenney store locations as a result of the creation of Catalyst Brands, and customers will still experience the brands in our portfolio as they exist today."
RELATED: Macy’s Is Closing 65 More Stores—Here's When.
Lord & Taylor is making a comeback, too.
JCPenney isn't the only formerly bankrupt department store to announce a comeback. In December, Lord & Taylor was acquired by Regal Brands Global, who announced plans to relaunch the brand as a digital retailer this year.
As Best Lifepreviously reported, "the new Lord & Taylor website will feature categories for designer and luxury brands, Lord & Taylor-branded merchandise, and a Gen-Z-centric shop with more affordable price points." It's still unclear if the department store will revive its physical footprint.
