JCPenney Stores Sold to Private Equity For $947 Million: How Will It Impact The 119 Stores Included in the Deal?

JCPenney stores–once part of the vibrant department store chain in the US–have sold 119 of its stores to private equity firm Onyx Partners Ltd., as announced by Copper Property CTL Pass Through Trust.

The move is part of JCPenney's ongoing restructuring of the business, following its bankruptcy filing in 2020, amid rising competition from e-commerce platforms.

More on the Store's Sale Transaction

In a press release from Copper Property, it stated that the aggregate purchase price for the Properties is $947 million in an all-cash transaction, subject to customary closing adjustments and prorations. Moreover, this transaction marks the culmination of an extensive marketing process conducted by the property management company Newmark.

The Properties are subject to a long-term triple-net master lease with Penney Intermediate Holdings LLC or affiliates thereof. The buyer has now completed its due diligence, and its deposit under the Agreement is non-refundable,' it stated.

The firm had also mentioned that the transaction is scheduled to close on or before September 8 this year, subject to customary real estate closing conditions.

'The Agreement provides certain limited termination rights on a property-by-property basis in connection with purchase rights in favour of ground lessors or purchase rights under reciprocal easement agreements, certain title defects, casualty events, or condemnation proceedings,' it further explained.

Breakdown of Stores Sold

In a portfolio showcase from Newmark, the locations of the properties across the US were visualised – including 21 in Texas, 19 in California, six each in Florida and Michigan, and five in both Illinois and Ohio.

The company stated that the majority of its assets are strategically located in major metropolitan areas surrounding cities such as Austin, Miami, Houston, Los Angeles, and New York, with 50% of the assets in the portfolio situated in high-growth Sunbelt states.

'Typically, the assets adjoin high-performing retail assets in exceptional locations, adjacent to an interstate highway or public transit and surrounded by extremely favourable demographics,' they stated.

Newmark also said that the properties in the portfolio are located in highly populated, affluent residential areas, with an average of 104,900 residents and an average household income of $111,900 (£84,229.37) within a three-mile radius.

Will This Affect The JCPenney Stores?

Despite this sale, both Newmark and Copper Property mentioned that all of these stores will remain operational.

The substantial site sizes—averaging 8.32 acres with stores averaging 132,700 square feet—also offer future ownership considerable opportunities for densification through redevelopment or repositioning.

Additionally, six of the properties include a landlord termination right, enabling the buyer to terminate the JCPenney lease with 24 months' notice.

It should be noted that Newmark was exclusively retained by Copper Property Trust in 2021 and, since then, has sold 39 JCPenney Retail Portfolio assets for a total of $515 million (£387.65 million).

JCPenney's Worsening Financials

JCPenney's fiscal year, which ended February this year, was marked by a sharp revenue decline and a substantial loss. Total net sales (excluding credit card income) fell 8.6% year‑over‑year to approximately $6.3 billion (£4.74 billion), and the company swung from prior-year net income to a $177 million (£133.23 million) net loss.

In Q4 alone, net sales dropped over 9% to $2.09 billion (£1.57 billion), and it posted a $64 million (£48.17 million) loss, compared to $19 million (£14.30 million) in income a year earlier. Despite these headwinds, adjusted EBITDA remained positive at around $172 million (£129.47 million), underscoring modest margin control amid restructuring challenges.