Amazon could buy JC Penney’s entire 846 store estate as the US department store struggles to keep its head above water after it filed for Chapter 11 bankruptcy reorganisation.
According to a report published by WWD, Amazon is in “dialogue” with the embattled giant regarding the acquisition of either all or parts of JC Penney’s massive store estate.
It comes after the 118 year-old department store became the fourth prominent American retailer to file for Chapter 11 bankruptcy during the coronavirus pandemic over the weekend, set to offload 30 per cent of its store estate.
While it’s unclear what Amazon’s plans for its estate will be, one source told WWD that a team of the online giant’s representatives were in Plano, Texas, where JC Penney is based, “as we speak”.
READ MORE: JC Penny files for Chapter 11 bankruptcy
“There is a dialogue and I’m told it has a lot to do with Amazon eager to expand its apparel business — for sure.”
Amazon has been exploring a large-scale venture into physical retail for some time, and according to the source the locations could become “a new tech-driven retail model”.
Alternatively, numerous locations could be converted into Amazon fulfilment centres.
“Penney’s has about 30 freestanding locations with a lot of land, which could be converted. They do have some good real estate”, the source added.
Amazon declined to comment on the potential deal.
On Monday JC Penney announced that it planned to close some 242 stores over the next two years, reducing its store estate from 846 to 604 by fiscal year 2021.
When it issued its Chapter 11 bankruptcy filing on Friday, the retailer said it had received $900 million in financing to help it operate during the restructuring.
JC Penney joins fellow department store chains Stage Stores and Neiman Marcus and fashion retailer J.Crew in filing for bankruptcy reorganisation.
Many experts are pessimistic about JC Penney’s survival even as it sheds its debt and shrinks the number of its stores.