J C Penney Company Inc (NYSE:JCP) three year recovery story has been about making corrective financial choices. In a latest such move, the department stores will sell its Plano, Texas-based headquarters with partial leaseback to better manage its expenses. CEO Marvin Ellison said the real estate boom in Plano and North Texas could not have come at a better time. The HQ sale would fetch the much needed funds to not only lower outstanding debt but also ‘create long-term savings for the company.’
Agility without debts
This is the second time that J C Penney Company Inc (NYSE:JCP) will sell its real estate.
The company had earlier sought expansive funds in 2012, to mark a failed turnaround under former CEO Ron Johnson. The sale of non-core real estate had seen the company raise 526 million in value.
The sale of assets and collateral, which has been a time-tested move by debt-laden companies in the past, could be J C Penney Company Inc (NYSE:JCP) last tryst, before it returns to profitable ways.
Back in 2013, when JCP badly needed funds, newly appointed CEO Mike Ullman had sought $1.75 billion loan from Goldman Sachs. Ullman led the company back to stability. In August 2015, Ellison took over the CEO reins, as Ullman preferred the role of Executive Chairman. However the loan came only after the company pledged its $4 billion real estate, such as the headquarters at Plano and others.
Plan is prime real estate with 240 Acres
The company will seek CBRE Capital Markets professional services to sell the Plano property.
J C Penney Company Inc’s (NYSE:JCP) Hq’s earlier valuation by Cushman And Wakefield without Legacy West is $762 million. The entire 240 acre of the property sale would now fetch Ellison the much-needed funds to lower debt as well as create financial assets like long-term savings.
