Once a mall mainstay and department store for generations of families since 1902, JCPenney has endured turbulent years marked by bankruptcy, 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 $947 million deal with private equity firm Onyx Partners Ltd., agreeing to transfer ownership of 119 store locations. The deal was made through the Copper Property CTL Pass-Through Trust, the entity created during JCPenney’s bankruptcy to hold and dispose of its real estate assets.
Copper Property disclosed that the amendment took effect on July 23 and was non-refundable, thereby guaranteeing the transaction, according to the trust’s press release. Once completed, the trust planned to distribute the proceeds to investors.
Under the terms of the agreement, the properties were subject to a triple net 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 condemnation proceedings.
Despite these arrangements, the trust cautioned that the transaction is subject to the satisfaction of several closing conditions and cannot be guaranteed. At the time, all 119 JCPenney stores remained open and operational.
The deal was originally expected to close on September 8, with the trust required to sell all properties by January 2026. However, repeated delays ultimately led to an unexpected outcome.
Months later, Copper Property revealed that the nearly $1 billion deal had not gone through. In a Dec. 22 Form 8-K filing, the trust issued a notice to Onyx Partners confirming that the deal will be terminated if the buyer does not complete the transaction by Dec. 26, 2025.
The filing does not specify what would happen to the 119 stores, and JCPenney has yet to issue a public statement on the failed deal or next steps.
This attempted sale dates back to JCPenney’s Chapter 11 bankruptcy filing in May 2020. Although the company cited the COVID-19 pandemic as a key factor, it was not profitable nearly a decade prior.
As part of its restructuring, CPenney secured $450 million in proprietary debt 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 operational assets.
Copper Property was created during this process to take ownership of 160 commercial properties and six warehouses. Administered by an affiliate of Hilco Real Estate LLC., the trust is responsible for owning, leasing and selling those assets.
At the time of the bankruptcy filing, JCPenney had 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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Nevada: 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-new 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 has also scaled back 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 was not just the final price paid,” said marketing expert Roy Harmon. “It was about the psychological thrill of the hunt. Customers loved the ‘win’ feeling of stacking coupons and getting a great sale.” By eliminating discounts, Johnson removed a key source of perceived value and delight. Customers, confused and alienated by the new approach, fled in droves.”
More store closings:
As foot traffic and sales declined and competitors took over, JCPenney’s debt continued to mount.
“The JCPenney case illustrates the complex dynamics of branding in the modern retail environment,” said attorney Schuyler Reidel. “While aspirations for revitalization are laudable, they must be based on a deep understanding of customer expectations and market realities to achieve successful outcomes.”
The COVID-19 pandemic has further added to JCPenney’s challenges, disrupting its supply chain and forcing temporary store closures during an already uncertain time.
Traditional brick and mortar retail continues to shrink. Rising operating costs and the rapid growth of e-commerce have reshaped consumer behavior, leaving mall storefronts empty and stand-alone locations shuttered across the country.
With 84.3 percent of Americans shopping online, U.S. e-commerce spending reached $1.34 trillion in 2024 and is projected to exceed $2.5 trillion in 2030, according to Capital One Shopping.
In 2024, US online sales accounted for 22.3% of global e-commerce spending, up nearly 1.5% from the previous year, and are expected to reach $1.47 trillion in 2025.
Retailers have announced 67 percent more store closings in 2025 than the previous year, according to CoreSight Research.
Related: Why Your Favorite Retail Store Is Going Out of Business
This story was originally published by TheStreet on December 27, 2025, where it first appeared in the Retail section. Add TheStreet as a favorite source by clicking here.