JCPenney merges with Sparc Group

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and JCPenney gets yet another lifeline.

Transcript

00:00I'm Conway Gittins reporting from New York City. Here's what we're watching on the street today.

00:04A group of retailers once left for dead are uniting in hopes of getting a piece of a U.S. consumer

00:09that's showing signs of life.

00:11J.C. Penney, the once venerable department store chain, is teaming up with Spark Group,

00:16which owns Forever 21, and Brooks Brothers, two specialty retailers far faded from glory.

00:22Other shop names included are Aeropostale, Eddie Bauer, Lucky Brand, and Nautica.

00:29This new retail conglomerate will go by the name of Catalyst Brands.

00:33In a press release, Catalyst says it now has a broad portfolio and will use A.I. to help

00:39meet the apparel needs of every demographic.

00:42Quote,

00:43Our relationships with more than 60 million customers and the deep data we have create

00:48a compelling consumer value proposition across our brands.

00:53This deal is risky to say the least.

00:55All these stores used to be mall favorites when malls were all the rage, but then online

01:00shopping took over, forcing malls to the brink of extinction.

01:04Mall owners Simon Property Group and real estate developer Brookfield, however, are

01:08betting they can revive these once prominent brands.

01:11Both companies teamed up in 2020 to buy J.C. Penney out of bankruptcy for $1.75 billion.

01:18And Simon has been the financial muscle behind Spark's retail scavenger hunt.

01:23Simon and Brookfield stand to gain from even a modest mall resurrection.

01:29This merger at least gives these recovering retailers a head start with $9 billion in

01:34sales, 1,800 locations, 60,000 employees, and supply chain synergies to hopefully capture

01:41more sales than they did separately.

01:44That'll do it for your daily briefing from New York City.

01:46I'm Conway Gittins with the Street.

01:53Thanks for watching.