Once a mall staple and a department store for generations of families since 1902, JCPenney has endured turbulent years marked by bankruptcies, mass store closings and restructuring efforts. Now, as the retailer continues its long road to recovery, another major setback has emerged.
In July 2025, JCPenney entered into a cash deal worth $947 million with private equity firm Onyx Partners Ltd., agreeing to transfer ownership of 119 stores. The deal was executed through Copper Property CTL Pass-Through Trust, the entity created during JCPenney’s bankruptcy to hold and dispose of its real estate assets.
Copper Property revealed that the amendment came into effect on July 23 and was non-refundable, securing the transaction, according to a news release from the trust. Once completed, the trust planned to distribute the profits to investors.
Under the terms of the agreement, the properties were subject to a triple net master lease, under which JCPenney remains responsible for all operating costs, including property taxes, insurance and maintenance. The lease also included limited termination rights for individual locations under specific circumstances, such as property damage or eminent domain proceedings.
Despite these agreements, the trust cautioned that the transaction was dependent on the satisfaction of several closing conditions and could not be guaranteed. At that time, all 119 JCPenney stores remained open and operational.
The deal was initially expected to close on September 8, with the trust obligated to sell all the properties by January 2026. However, repeated delays ultimately led to an unexpected result.
Months later, Copper Property revealed that the nearly $1 billion deal had not closed. In a Form 8-K filing dated December 22, the trust issued a notice to Onyx Partners confirming that the deal would be terminated if the buyer did not complete the transaction by December 26, 2025.
The filing does not specify what would happen to the 119 stores, and JCPenney has yet to issue a public statement about the failed deal or next steps.
JCPenney’s nearly $1 billion real estate deal falls through, leaving 119 locations in limbo. Shutterstock
This attempted sale dates back to JCPenney’s Chapter 11 bankruptcy filing in May 2020. While the company cited the COVID-19 pandemic as a key factor, it had not been profitable for nearly a decade prior.
As part of its restructuring, CPenney obtained $450 million in debtor-in-possession financing to continue operating while it reorganized its business.
The retailer was eventually acquired by Simon Property Group (SPG) and Brookfield Asset Management (BAM) for $1.75 billion, transferring ownership of its retail and operating assets.
During this process Copper Property was created to take ownership of 160 commercial properties and six warehouses. Managed by an affiliate of Hilco Real Estate LLC., the trust is responsible for owning, leasing and selling those assets.
At the time of filing for bankruptcy, JCPenney closed more than 200 stores nationwide. Earlier this year, the retailer confirmed plans to close seven additional locations.
Newmark previously owned 121 JCPenney store properties in 35 states. In early 2025, it sold two of those properties, one in Florida and one in Pennsylvania, to Simon Property Group and Brookfield Asset Management.
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Texas: 21
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California: 19
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Florida: 6
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Michigan: 6
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Illinois: 5
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Ohio: 4
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Arizona: 4
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New Jersey: 4
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Connecticut: 3
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Snowfall: 3
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New York: 3
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Oklahoma: 3
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Pennsylvania: 3
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Washington: 3
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Arkansas: 2
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Colorado: 2
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Kentucky: 2
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Maryland: 2
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Missouri: 2
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New Mexico: 2
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Puerto Rico: 2
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Tennessee: 2
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Virginia: 2
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Georgia: 1
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Iowa: 1
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Idaho: 1
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Indiana: 1
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Kansas: 1
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Louisiana: 1
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Massachusetts: 1
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Minnesota: 1
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Mississippi: 1
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North Carolina: 1
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New Hampshire: 1
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Oregon: 1
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Wyoming: 1
Analysts attribute JCPenney’s decline to a major rebranding effort in 2011 under then-newly appointed CEO Ron Johnson, who introduced a new logo and redesigned stores to promote a more modern department store concept.
At the same time, JCPenney abandoned its long-standing promotional pricing strategy, replacing frequent sales and coupons with everyday low prices. It also reduced its private label offerings to focus on national brands.
The change failed to resonate with its core customers and instead created a perception of higher prices.
“For the JCPenney shopper, the brand experience wasn’t just about the final price paid,” said marketing expert Roy Harmon. “It was about the psychological thrill of the hunt. Customers loved the feeling of ‘winning’ by racking up coupons and getting a great deal. By eliminating discounts, Johnson eliminated a key source of perceived value and delight. Customers, confused and alienated by the new approach, fled in droves.”
More store closures:
As foot traffic and sales declined and competitors gained the upper hand, JCPenney’s debt continued to rise.
“The JCPenney case illustrates the complex dynamics of brands in the modern retail environment,” said attorney Schuyler Reidel. “While revitalization aspirations are commendable, they must be based on a deep understanding of customer expectations and market realities to achieve successful outcomes.”
The COVID-19 pandemic further added to JCPenney’s challenges, disrupting its supply chain and forcing temporary store closures during an already uncertain time.
Traditional retail continues to shrink. Rising operating costs and the rapid growth of e-commerce have reshaped consumer behavior, leaving mall storefronts empty and stores closed across the country.
With 84.3% of Americans shopping online, US e-commerce spending reached $1.34 trillion in 2024 and is projected to surpass $2.5 trillion in 2030, according to Capital One Shopping.
In 2024, online sales in the United States accounted for 22.3% of global e-commerce spending, up almost 1.5% from the previous year, and are expected to reach $1.47 trillion in 2025.
Retailers announced 67% more store closings in 2025 than the previous year, according to CoreSight Research.
Related: Why Your Favorite Retail Store Is Closing
This story was originally published by TheStreet on December 27, 2025, where it first appeared in the Retail section. Add TheStreet as a preferred source by clicking here.