For bankrupted J.C. Penney, a liquidation is “not in the cards,” according to the chain store chain’s lawyer.
Penney is progressing with a sale that should be completed by this fall, lawyer Joshua Sussberg of Kirkland & Ellis stated during a court hearing Wednesday mid-day.
“I want to say, unequivocally, we have had not one discussion about a liquidation,” Sussberg said about Penney’s restructuring process. “It’s simply not in the cards.”
Sussberg mention a report earlier in the week from the New York Post hat stated the private-equity company Sycamore was planning to make a $1.75 billion bid to acquire the 118-year-old chain store chain as well as merge it with competing Belk.
He called the tale “ill-informed” as well as said, regarding Sycamore’s strategies to merge Penney with Belk, “that is totally false.”
Sycamore declined to comment.
There are three different bids being taken into consideration for Penney’s property as well as other possessions, which would certainly maintain the retailer running its very own stores, Sussberg stated. He declined to name the prospective buyers, claiming the proposals are private.
Penney applied for Chapter 11 bankruptcy protection on May 15, bore down by debt and also battered by the pandemic.
Previously this month, the business revealed it would be giving up roughly 1,000 employees, as it moved forward with closing 150 locations across the US. When the retailer submitted, it was still running about 860 stores.
Penney stated Wednesday that all stores have resumed, after being briefly shut because of the stay at home orders.
It claimed its off-mall places, of which it has 173, remain to carry out better than its shops in encased shopping malls, of which it has 520. Sales at off-mall stores are down around 26%, while sales at Penney stores in shopping malls are down around 33% considering that they have opened, it said.
The chain store continues to speak with its property owners to discuss much better rents, according to Sussberg, which is permitting the company to cut costs.
Forty retailers consisting of Penney have actually declared insolvency in 2020, according to a monitoring by S&P Global Market Knowledge. The listing is still anticipated to expand.
A number were already struggling prior to the pandemic banging the U.S. economic climate, requiring stores regarded as unimportant in malls to be boarded up. The pressures have actually just increased considering that for a sector already going through seismic changes in consumer habits and also preferred buying locations. Outlet store’ supremacy in retail has been waning.
According to Sussberg, Penney aims to have “mass agreement” regarding its go-forward method by next month.