The future of J.C. Penney (OTC:JCPN.Q) is in more serious doubt than ever following the collapse of talks between the troubled retailer and two of its landlords regarding a sale. The impasse was revealed by Joshua Sussberg, a lawyer representing J.C. Penney, in a bankruptcy court hearing on Monday.
According to Sussberg, discussions between the retailer and two landlords, real estate investment trust (REIT) Simon Property Group (NYSE:SPG) and real estate investment company Brookfield Property Partners (NASDAQ:BPY), occurred this past weekend.
The company, Simon, and Brookfield Property are in negotiations over J.C. Penney's retail assets, chiefly a clutch of its stores. Combined, Simon and Brookfield Property are the landlords for over 100 JCPenney stores. Prior to declaring bankruptcy in May, the storied retailer had 846 outlets.
If a deal were reached, it would likely pull the retailer out of bankruptcy. Yet talks have stalled over the terms of future leases, among other issues. Sussberg didn't delve into details during the court hearing, but noted that J.C. Penney could still make a deal with creditors if discussions with Simon and Brookfield Property fail. The creditors and the retailer agreed to a tight deadline of Sept. 10, 2020, for this to occur.
Neither Simon nor Brookfield Property has yet commented on Monday's court proceeding. J.C. Penney also has not issued an official reaction to the news.
J.C. Penney, a classic old-line department store operator with a large brick-and-mortar footprint, was already struggling with the retail apocalypse when the novel coronavirus pandemic hit early this year.