If the news that Sycamore Partners is going to acquire the struggling (near death) retailer JC Penney, and merge it with the struggling retailer Belk, are true, it means one thing – the retailer and name JC Penney is about to disappear.
Details are in the article I attached. However, I believe the following quote is troublesome:
“JCP is the lifeboat for Belk, which wants to compete with Macy’s nationally,” according to the source with knowledge of the deal.
A truism in business is that combining two bad companies doesn’t produce one good company. Belk cannot brand 250 JCP stores ‘Belk’ and then compete with Macy’s. Based on my knowledge of Macy’s and Belk, Macy’s is the far better company.
If the news is accurate that once 250 JCP stores have been selected for rebranding to Belk, and the remaining JCP stores will be liquidated, it opens the door for Amazon and other retailers to acquire stores, some of JCP’s distribution centers and possibly some of their private-label brands.
Why did this happen to JCP? It’s easy. Former CEO Ron Johnson inflicted a fatal wound on JCP. The CEOs that followed Johnson didn’t know how to stop the bleeding.