By Michelle Price
Special to the UCBJ
UPPER CUMBERLAND – Struggling retail chains have been tremendously impacted by stay-at-home orders and limited hours after reopening. Two major players in the retail world, Stage Stores and J.C. Penney, are now facing the end of their existence.
Stage Stores, parent company of Goody’s, Goldman’s, Peebles, Bealls and Palais Royal, filed for Chapter 11 bankruptcy in May 2020 and has begun the liquidation of its remaining stores. Stage Stores currently operates the Goody’s located in Three Star Mall, McMinnville and the Goody’s in Highland Square, Crossville. Liquidation sales are underway at all the company’s stores with Aug. 30 projected as the final day of operation.
New York based, private equity firm Sycamore Partners (Sycamore) has made a bid for bankrupt J.C. Penney, offering $1.75 billion to buy the 118-year-old chain. Sycamore recently backed out of a deal to purchase a 55% stake in Victoria’s Secret, claiming that the company’s response to the COVID-19 pandemic breached their contract. Sycamore owns the retailers Belk, Talbots, Staples and The Limited.
Reports are that the Sycamore bid is the best offer received for the 846-store chain. Other competing bidders include Canadian Hudson’s Bay Company with a $1.7 billion offer, and mall owners Simon Property Group Inc. with Brookfield Property Partners LP who have made a joint offer of $1.65 billion.
The Sycamore plan involves rebranding 250 J.C. Penney stores as Belk stores in markets where the two retailers don’t overlap. The rest of the J.C. Penney locations would be liquidated, sources have said.
Where this possible merger leaves the J.C. Penney store in Cookeville is unknown. If a merger with Belk is completed, that would leave the company with two locations to choose from, both with benefits and drawbacks.
The Cookeville Mall location benefits from a long-term lease that provides the store retail space with little to no rent through 2025. The downside to the location is without other major retailers nearby, there is little retail foot traffic. The Jackson Plaza location has plenty of foot traffic, but also comes with a hefty price per square foot.
Exact details of Sycamore’s offer are being kept confidential, although their plan for the merger with Belk was shared with the other bidders. J.C. Penney’s attorneys stated that they anticipated a sale to be completed this fall.