There could soon be a marriage of struggling department store chains as the private equity firm that owns Belk appears poised to purchase bankrupt JCPenney and merge the two.
The New York Post reported that Sycamore Partners has put in a bid to purchase JCPenney for $1.75 billion and combine it with Belk. A source told the Post that JCPenney is a “lifeboat” for Belk, which wants to compete with Macy’s on a national level.
Neither company commented on the report.
Sources told the Post that the Sycamore plan calls for the rebranding of about 250 JCPenney locations to the Belk brand in markets where the retailers do not compete. At the time of its bankruptcy filing, JCP operated about 850 stores. Belk currently operates 300 locations in the south.
Sycamore is not the only company said to be bidding for JCPenney. Other bidders include Hudson’s Bay Company, parent of Saks Fifth Avenue; and mall operators Simon Property and Brookfield Property.
Should the two department stores merge, how the new company proceeds as a large department store chain with more than 500 stores will be closely watched by consumers and retail observers.
For more than a decade department stores have struggled to stay competitive in an ever-changing retail landscape. Macy’s, for example, has closed stores as sales continued to decline and JCPenney’s recent bankruptcy filing had been expected by many for years.