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J.C. Penney sells Simon Property stake for $248M

Associated Press
July 23, 2012
Keywords
Commercial Real Estate, Department Stores, Real Estate & Retail, Retail, Retailers, Shopping Centers, Simon Property Group
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J.C. Penney Co. said Monday that it is selling the bulk of its interest in mall developer Simon Property Group Inc. for $248 million as it focuses on its core business.

The Plano, Texas, company said the sale announced Monday was the first step in a plan, put in place last year, to sell off assets that don't make up the crux of its department store business. J.C. Penney also said the move bolstered its balance sheet.

Under a new CEO, former Apple Inc. executive Ron Johnson, J.C. Penney is overhauling every aspect of its business from its pricing to the brands it carries. But some investors have concerns about the company's ability to turn its business around as sales trends deteriorate.

J.C. Penney said that Indianapolis-based Simon redeemed 2 million units of limited partnership interests from the department store chain for $248 million. JCP Realty, a unit of J.C. Penney, kept about 205,000 limited partnership units.

J.C. Penney received the units at the time of Simon's initial public offering in 1993 as part of joint-venture investments the companies made together in several shopping malls.

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  • Did You Have a Comment To Make?
    ChrisJuly 24, 2012 2:53 AM
    Kay, I am sure you think you made a point, but your post came across as just crazy ranting. Also, PepsiCo posted $9.63 billion in profits in 2011 (about $1 billion more profitable than Coca-Cola in 2011). So, if that is your idea of "going under," please sign me up because I would be over 9 billion dollars richer. Now, if you have a sensible comment to post, and you want to explain what point you are trying to communicate, then please do so. Otherwise, you might want to channel your energies into something more constructive.
    Reply to CommentFlag Comment
  • Shopping?
    kayJuly 23, 2012 11:45 PM
    i think JCP is getting the message? people dont want things shoved in their faces and now JCP is going to go under... maybe Coke should wake up too before they end up going the way of Pepsi and JCP! Redact SRGL or they can just go under too!
    Reply to CommentFlag Comment
    • Bolsters?
      EstaJuly 23, 2012 4:33 PM
      How does converting securities to cash bolster the Balance Sheet? Were they carrying them at less than market value? Sounds to me more like a last ditch effort to raise cash. I wonder what JCP's cash burn rate is, and how much time this buys them. Not much, I would think.
      Reply to CommentFlag Comment

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