CBS Detroit – According to the Associated Press, there is a new deal that could save JCPenney from its bankruptcy woes. JCPenney has been fighting to stay alive and the Coronavirus Pandemic hasn’t helped things either. Mall Owners Simon Property Group and Brookfield Property Partners are close to ti signing a deal to buy JCPenney.
According to JCP’s attorney, Josh Sussberg, this tentative deal will save 70,000 jobs and avoid liquidation during a bankruptcy court hearing. JCP would have an enterprise value of $1.75 billion which includes $300 million from the two new owners, and $500 million in new debt. As a result of its bankruptcy, JCP has had to close a third of its stores from 846 to about 600. These closings included seven in Michigan.READ MORE: 'Big Brother' Debuts Wednesday in a Special 90-Minute Live Event
The Associated Press reports 40 retailers have had to file for Chapter 11 bankruptcy protection in 2020 from COVID-19. Here in Michigan, many retailers in malls were the hardest hit as they were closed by the state due to social distancing guidelines. The pandemic made a lot of consumers shift to online purchases, which is still a challenge for department stores.
READ MORE: "The Challenge: USA" Brings Together Former Competitors from "Survivor," "Big Brother" & More
This new agreement allows two of the nation’s largest landlords to keep JCP alive as anchor stores in malls across the U.S. As stores close in malls, it triggers a clause in many lease agreements that allows other stores to break their leases without penalties, or get lease reductions. These anchor stores also serve as hubs that for many is the main reason why shoppers flock to malls.
Along with this deal, Simon also joined forces with retail venture company and licensing company Authentic Brands, to purchase Brooks Brothers for $325 million. Brooks Brothers has been in business for 200 years. Authentic Brands owns and manages such stores as Barney’s New York, Nautica, and Forever 21.
MORE NEWS: Big Brother 24 Features Michigan Native, Taylor Hale
© 2020 CBS Broadcasting Inc. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed. Information from the Associated Press contributed to this report.