In the three months since J.C. Penney (OTC: JCPN.Q) filed for bankruptcy, there have been plenty of bizarre (and not very credible) rumors about who might save the storied department store chain from liquidation. One report pegged Amazon as a buyer. Another said that retail-focused private equity firm Sycamore Partners might buy the chain in order to convert 250 stores to the smaller, lesser-known Belk nameplate that it also owns, while liquidating the rest. Even Saks Fifth Avenue owner Hudson's Bay put in a bid.
However, the most plausible report to hit the rumor mill was that a consortium including top mall owners Simon Property Group (NYSE: SPG) and Brookfield Property Partners (NASDAQ: BPY) (NASDAQ: BPYU) was interested in buying J.C. Penney. A recent report from The Wall Street Journal confirms that the Simon/Brookfield-led group has the inside track in the bidding.
Prior to its bankruptcy filing, J.C. Penney operated 846 stores. Its tentative bankruptcy plan presented in May called for shrinking the store count to 604 units, of which about 74% (nearly 450) would be located in malls. For comparison, top department store operator Macy's is in the midst of slashing its store count to fewer than 400 full-line locations.