Sales growth of the 118-year-old retail chain, JC Penney, has largely slumped throughout 2020, according to data service Facteus, which tracks debit and credit card spending.
The data on JC Penney’s weekly consumer spend shows how deep in the red the company has fallen this year.
After filing for Chapter 11 bankruptcy protection on May 15, the retailer saw interest from a host of suitors, including Sycamore Partners, a private equity firm with almost $5 billion in assets under management, as first reported by NYPost.
The retail-focused PE firm, which was earlier slated to buy the lingerie chain, Victoria’s Secret, reportedly launched the highest bid at $1.75 billion. Other bidders include Saks Fifth Avenue owner Hudson’s Bay, with a $1.7 billion offer, and mall operators Simon Property and Brookfield Property, which teamed up with a $1.65 billion offer, according to multiple outlets.
Market reports have also pegged Amazon as a prospective buyer, with the possibility of transforming the real estate left by the ailing department store into fulfillment centers, according to various sources, including WSJ.
Although JC Penney’s future is unfolding in real time, with shares recently trading around 30 cents per share – a drop from $1.12 at the start of the year – shareholders still await a deal.
Plano, Texas-based JC Penney recorded a year-on-year drop in sales of almost 90 percent in 2020 during the covid breakneck progression periods of March, April and May but recorded a spike in the latter half of June, according to Facteus data, which measures consumer card spending through its transaction data panel.
Declining sales due to covid have further pressured retailers. JC Penney joined the list of other troubled brands that filed for bankruptcy in May, including TPG Capital and Leonard Green & Partners-backed J.Crew, as well as Neiman Marcus, a portfolio company of Ares Management.
Lenders to JC Penney, which include private equity firms, are led by the hedge fund H/2 Capital Partners. JC Penney plans to close almost 30 percent of its 846 stores, dropping the count to 604.
Action Item: Check out the 8-k filing by J.C. Penney.