J.C. Penney’s lenders extended a key deadline over the weekend as negotiations continue about the fate of the Plano, Texas-based retailer.
The lenders filed a notice to extend the deadline as the Wall Street Journal reported speculation Sunday that Amazon may be interested in buying some of Penney’s stores with major mall owner Simon Property Group.
The lenders’ deadline was moved to Wednesday from Monday, according to a filing in the U.S. Bankruptcy Court on Saturday. Penney’s lenders are selecting a bidder for the Penney retail company, which is expected to exit Chapter 11 later this year.
A corresponding hearing has been rescheduled for Wednesday. A winning bidder for the 118-year-old department store chain could be approved by the end of August.
The idea that empty mall stores are a good fit for Amazon to use as fulfillment centers is not a new one. Amazon has bought two malls in Ohio for new fulfillment centers. And interest from Amazon has been a topic of speculation throughout Penney’s bankruptcy.
Penney filed for bankruptcy in May with a plan to split the company in two. One business would continue to operate the J.C. Penney chain of stores, and the other would be a real estate investment trust that would own Penney property, including stores and distribution centers.
Separately, Penney is in the process of selling 142 store leases where it’s now holding store closing sales. Penney is also selling 24 stores that it owns, but it hasn’t said whether those stores are closing.
While aging malls may not be attracting shoppers anymore, the large properties are located at major intersections and where people live in suburbs and smaller towns.
Major department stores Macy’s, Nordstrom, Neiman Marcus and Penney’s have been using their mall stores as fulfillment centers in recent years, and they accelerated the pace of that activity during the pandemic. More shoppers tried curbside pickup for the first time when stores were closed in March, April and May.
While Amazon has been building large fulfillment centers in Dallas-Fort Worth, it has also moved into neighborhoods with smaller delivery stations. There are at least five so far, in Dallas, Farmers Branch, Fort Worth and Garland. And mall parking lots are big enough to park large numbers of Amazon delivery vans.
Delivery stations are part of Amazon’s effort to get closer to the customer. Those buildings are the final stop before an order heads out for delivery. Packages are sorted into routes to make sure promised delivery times are met, according to Amazon’s website.
Simon and Amazon are also looking at Sears locations, according to the Wall Street Journal article that quotes people familiar with the matter. Penney has 63 stores in Simon malls and Sears has 11 stores, according to its annual filing.
Another possible use of department store spaces, the article said, is for Amazon’s new grocery stores. The first one is in Los Angeles and is so far being used to fill online grocery orders. It’s in the Woodland Hills neighborhood but is not open to the public yet. Amazon has said the store will open later this year and will be different from Whole Foods Market, which Amazon purchased in 2017.
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