JCPenney successfully positioned itself as the go-to shopping destination for middle-class America for decades. At the start of the 21st century, the store operated more than 700 stores in the United States and Puerto Rico.
Although JCP remained incredibly popular throughout the 80s and 90s, the department store seemingly rested on its laurels. It was slow to reinvent itself to meet the changing tastes of middle-class buyers, and that was the start of the retail giant’s decline.
You may have noticed that the once-upscale company is often in the news, especially after filing for bankruptcy and passing into the hands of several acquiring companies at a dizzying rate. So, who owns JCPenney now, you might wonder? Is it true that Shaquille O’Neal is one of JCPenney’s owners?
Read on for the insider story about JCP’s owners and the slow rise and fall of one of America’s biggest retail conglomerates.
Who is JCPenney Owned By?
In May 2020, JCPenney filed for bankruptcy, a move that was a long time coming, given the company’s massive decline in sales, especially following the COVID-19 pandemic.
J.C. Penney closed numerous stores, laid off a large portion of its staff, and suffered a 43% decline in sales during the worldwide pandemic. It also vacated its massive and once-enviable Plano, Texas headquarters.
Following the bankruptcy filing, the Simon Property Group and Brookfield Asset Management acquired JCPenney. Simon and Brookfield are two of the largest mall operators and are now the new owners of the struggling department store.
The mall operators need JCPenney just as much as the retailer needs them. Simon and Brookfield are the landlords of more than 150 JCP stores across the country, and in these tough economic times, none of the developers wants its customers to vacate, leaving its retail centers empty.
With this acquisition, the J.C.Penney Company is no longer publicly traded, and its executives are answerable to the new owners. The companies’ real estate and the newly acquired retail business will operate as two separate entities.
Simon Property Group, Inc:
This real estate investment company invests in community and lifestyle centers, outlet centers, and shopping malls. Headquartered in Indianapolis, Indiana, Simon is the largest owner of shopping malls in the USA. The company owns 232 properties worldwide.
The company was founded in the 1960s by brothers Herbert Simon and Melvin Simon. They started by developing strip malls in the Indianapolis, Indiana, area. They took their company, Simon Property Group, public in 1993, in what is still the largest initial public offering of an investment trust in the real estate niche.
Brookfield Asset Management, Inc:
This Canadian multinational company is among the largest investment management companies in the world, with an estimated $725 billion worth of assets as of 2022. Its focus areas include private equity, infrastructure, renewable power, and real estate.
Through its Oaktree Capital subsidiaries, the company also buys distressed securities. The company’s headquarters are in Toronto, but it has corporate offices in London, New York City, Shanghai, Sydney, Dubai, Mumbai, and Sáo Paulo.
Before 2005, Brookfield Asset Management Inc was actually known as Brascan Corp. The company does have an interest and history in Brazilian investments, including oil pipelines, real estate, and infrastructure.
Its subsidiaries include Brookfield Business Partners, Brookfield Property Partners, Brookfield Renewable Partners, and Brookfield Infrastructure Partners.
Does Shaquille O’Neal Own JCPenney?
Aside from his legendary accomplishments as a former NBA athlete, Shaquille O’Neal has morphed into a savvy businessperson.
He has invested in many brands, and he once said that he owns more than 50 brands, including car washes, fitness centers, restaurants, movie theatres, nightclubs, and a shopping center.
He also owns shares in Sports Illustrated, Marilyn Monroe, Brooks Brothers, and Juicy Couture, among others.
That said, Shaq does not own JCPenney. But, he is the second highest shareholder of the Authentic Brands Group, one of the companies behind the acquisition of retailers such as Reebok, Forever 21, Barneys New York, and JCPenney.
The biggest investor and shareholder in the Authentic Brands Group is the company’s founder and CEO, Jamie Salter.
O’Neal became an investor in ABG in 2015 when the company bought half the right of the basketballer’s name brand. Instead of taking the money and walking away, Shaq proposed that he reinvest the money back into ABG, a move that made him the second-largest investor in the company.
Since becoming a major ABG shareholder, O’Neal has been a key decision-maker in many of the company’s investments, such as the acquisition of the shoe company Reebok. In addition, in 2018, O’Neal was made a JCPenney representative for the “big and tall style” campaign.
This deal with JCPenney led to Shaq partnering with the retail clothing store to develop a clothing line named “Shaquille O’Neal XLG,” targeting big, tall men. The clothing line features more than 60 products, including shirts, pants, suits, and accessories such as hats.
Does The Same Company own Kohl’s and JCPenney?
After saving JCPenney from bankruptcy by buying off the retailer, the new owners, Brookfield and Simon, made an offer in May 2022 to acquire Kohl’s. Kohl’s was JCPenney’s arch-rival, but the two once-giant clothing retailers have taken a similar path with declining sales, layoffs, and store closures.
In the deal, the new JCPenney owners offered $68 a share to acquire Kohl’s, a move that would value the company at $8.6 billion.
According to an insider source, Brookfield and Simon plan to keep the two retailers separate while streamlining their operations. The goal is to restore the retailer’s former glory while cutting costs. If the acquisition is successful, the investors plan to cut JCPenney and Kohl’s costs by $ 1 billion in three years.
However, according to market analysts, the move to own J.C. Penney and Kohl’s at the same time could be too much for Brookfield and Simon to swallow.
“Creating one big business from two struggling companies would not magically help the fortunes of either, ” said Neil Saunders, the GlobalData Managing Director.
“If the acquisition is successful, it would put a lot on the plate of the investors given that JCPenney’s journey to recovery is a very long way from completion, and Kohl’s needs a lot of work to restore its fortunes.”
James Cash Penney, the company’s original owner, might be suprised by the changes in his company. But, as they say, change is always a good thing, and we sure hope JCPenney can regain its original glory.
