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The New York Times reports that two mall operators - Simon Property Group and Brookfield Property Partners - are going to acquire JC Penney out of bankruptcy, "averting a total liquidation."

The Times writes that "Simon and Brookfield will pay about $300 million in cash and assume $500 million in debt to buy J.C. Penney, lawyers for the retailer said at a Bankruptcy Court hearing. The deal will split J.C. Penney into separate companies, with Simon and Brookfield running the retail business and its creditors owning a portion of its real estate. In all, the deal values J.C. Penney at $1.75 billion, including the funds committed to support its business after it emerges from bankruptcy … It was not immediately clear how many stores the mall operators will keep open, or exactly how many jobs they would preserve."

One of the reasons that the two mall operators may have found JC Penney worth acquiring is that "smaller mall retailers often have so-called co-tenancy clauses in their leases, which allow them to pay reduced rent or even break their leases if two or more anchor stores - like Sears, Macy’s and J.C. Penney - leave a location … J.C. Penney’s bankruptcy already had serious implications for American malls and workers, as the company prepared to close as many as 250 locations and started liquidations at more than 100 stores this summer."

KC's View:

There's an old Russian proverb that goes, ""Nothing is more permanent than a temporary solution."

I think that applies here.  They may be preventing the loss of some retailers and keeping the JC Penney brand on life support, but do they have a vision for how to turn it into a 21st century retailing entity that is compelling, relevant, resonant and sustainable?

I wouldn't bet on it.