Amazon.com has wasted no time in pursuing a possible acquisition of all or some of J.C. Penney’s business, according to news initially broken by WWD.
According to one unnamed source, Amazon already has a “team in Plano (TX),” where Penney is headquartered. Why Amazon might be interested in Penney remains unclear, although three potential factors have been raised in the reporting including the e-tailing and tech giant looking to:
- Grow its apparel and accessories sales;
- Turn some of the department store’s properties into distribution facilities; and/or
- Create “a new tech-driven” store model that would make use of its Just Walk Out cashier-free system.
Penney is also likely to be a relatively inexpensive acquisition after filing for Chapter 11 bankruptcy protection and having its stock sales frozen on the New York Stock Exchange.
The department store retailer made clear in its petition to the court that it would have to pursue a sale of its assets if it was unable to gain the support of lenders by July 15 for its business plan. Seventy percent of the chain’s lenders have agreed to date to support its restructuring proposal.
Penney announced it would close 242 of its 846 stores, spin off its real estate as a separate publicly-traded investment trust and push ahead with a turnaround plan put in place by CEO Jill Soltau that focuses on core categories such as women’s apparel along with improved customer service and low prices.
“Until this pandemic struck, we had made significant progress rebuilding our company under our Plan for Renewal strategy — and our efforts had already begun to pay off,” said Ms. Soltau in a statement. “While we had been working in parallel on options to strengthen our balance sheet and extend our financial runway, the closure of our stores due to the pandemic necessitated a more fulsome review to include the elimination of outstanding debt.”
Neither Amazon nor Penney would comment on discussions, if any, between the parties.
