The acquisition is significant because Simon is desperate to remain a landlord to big-name anchor stores, which have been disappearing from its malls amid the devastating coronavirus pandemic.
Store shutdowns, job losses and little-to-no foot traffic have crippled mall business for nearly the entire year.
Last week, Macy’s announced it was planning to abandon its core position as an anchor store at many shopping malls and move into smaller, standalone stores in an effort to regain its footing.
»RELATED: Macy’s to abandon some shopping malls, move into smaller stores
Moves like that by a collection of other tenants would threaten the existence of malls altogether, experts say.
When Forever 21 filed for bankruptcy in the months before the pandemic, Simon and Brookfield pitched in on the $81.1 million to buy the fashion retailer, which kept stores open at 100 mall locations.
The huge price tag for JCPenney, meanwhile, will entail a combination of cash and debt, according to reports.
JCPenney’s profits had been sinking many years before the pandemic swept the 118-year-old department store into bankruptcy in May. The chain has continually struggled to pay its bills and hasn’t turned a profit since 2010, CNN reported.
After the bankruptcy filing, the company began to downsize, shuttering more than a hundred of its 800 remaining locations nationwide.
The pandemic shutdown has hammered many retailers, particularly the high-end department store chains that serve as anchor tenants at shopping malls across the country.
And with the holiday shopping season just around the corner, malls are struggling like never before.
Big department stores such as JCPenney have always been a mainstay at malls as they lure retail traffic to smaller shops, kiosks and food courts, providing much-needed financial stability.
But the pandemic has stifled what had always been a surefire business model.
As millions of people have lost jobs or continue to work from home, the demand for clothing and apparel — JCPenney’s main draw — has all but vanished.
A record 9,300 stores closed last year, and closings could nearly triple to 25,000 in 2020, according to CNN.
Additionally, the rise of consignment and thrift stores — coupled with a dramatic surge in online shopping —has steered many consumers away from the big stores.