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Amazon Said To Be In Talks To Buy Bankrupt JC Penney (investors.com) 71

Posted by BeauHD from the shopping-spree dept.
phalse phace shares a report from Investor's Business Daily: Amazon is reportedly in talks with JCPenney, the debt-laden retailer that filed for bankruptcy protection last week. Trading in JCPenney stock was halted while Amazon stock moved up. According to apparel industry trade publication Women's Wear Daily, Amazon has a team in Plano, Texas, where JCPenney is headquartered. The report cited an unnamed source saying there is a dialogue between the two companies. The acquisition of JCPenney could potentially bolster the online retailer's burgeoning apparel business. It's also possible Amazon could be interested in acquiring some of the stores that JCPenney plans to sell and use them as distribution outlets.
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Amazon Said To Be In Talks To Buy Bankrupt JC Penney More

Amazon Said To Be In Talks To Buy Bankrupt JC Penney

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  • perfect environment for predators (Score:4)

    by rldp ( 6381096 ) on Tuesday May 19, 2020 @05:07PM (#60080236)

    either amazon or china buys it, at the end of the day it's the same thing

    • Re:perfect environment for predators (Score:5, Interesting)

      by ShanghaiBill ( 739463 ) on Tuesday May 19, 2020 @05:21PM (#60080290)

      either amazon or china buys it, at the end of the day it's the same thing

      I don't see why anyone would buy JC Penny. Most of their properties are leased, so you aren't buying property. You aren't buying a supply chain since any of their suppliers will be happy to sell directly to Amazon. You aren't buying loyal customers. If JC Penny had those they wouldn't be bankrupt. The only thing you are buying is the brand, which is worth next to nothing.

      I don't get it.

      • Isn't JC Penny also spinning off what real estate they do own into a separate entity as part of the bankruptcy?

      • Re: (Score:3)

        by Duds ( 100634 )

        I assume their plan is to pay next to nothing :)

      • Comment removed based on user account deletion
      • My guess is that they are buying the name to appeal to older generations who shopped there when they were more popular. I have older relatives who won't use Amazon, but will order from stores like Macy's because they're familiar with the brand.

        • Re:perfect environment for predators (Score:5, Insightful)

          by cusco ( 717999 ) <brian DOT bixby AT gmail DOT com> on Tuesday May 19, 2020 @11:16PM (#60080982)

          People are missing the point that JC Penneys isn't just storefronts, they're an entire national retail infrastructure with supply contracts, warehouses, trucking contracts, railroad depots, trained staff, advertising contracts, the whole nine yards. To build that up from scratch would cost billions and take years. The name and goodwill are fairly useless, but the infrastructure is worth a goodly amount and Amazon has more money than they can spend at present.

          • Re: (Score:3)

            by AmiMoJo ( 196126 )

            TFA mentions that Amazon might want their clothing lines too.

          • My thought is all of that infrastructure is dated as hell and would be one of the first things that Amazon would strip out.

          • People are missing the point that JC Penneys isn't just storefronts, they're an entire national retail infrastructure with supply contracts, warehouses, trucking contracts, railroad depots, trained staff, advertising contracts, the whole nine yards. To build that up from scratch would cost billions and take years.

            Amazon already has a far better set of those things than Penney ever had.

        • Amazon is now so flooded with poorly written Chinglish product descriptions for crappy products that anyone in the world can sell via the platform, that shopping at some place like Macy's that actually curates the products they sell is starting to look really appealing (for the type of merchandise that they sell).

      • They're paying for the locations, maybe?

        Turn all of them into huge spaces for Amazon Lockers?

        • They're paying for the locations, maybe?

          JC Penny doesn't own the locations. They mostly lease.

          The property owners would be delighted to have Amazon as a new tenant with or without JC Penny.

          Turn all of them into huge spaces for Amazon Lockers?

          People don't want to drive to a regional mall to pick up a package. A neighborhood convenience store or gas station is a better location for Amazon Lockers.

      • either amazon or china buys it, at the end of the day it's the same thing

        I don't see why anyone would buy JC Penny. Most of their properties are leased, so you aren't buying property. You aren't buying a supply chain since any of their suppliers will be happy to sell directly to Amazon. You aren't buying loyal customers. If JC Penny had those they wouldn't be bankrupt. The only thing you are buying is the brand, which is worth next to nothing.

        I don't get it.

        they could quickly convert them to amazon physical stores,

        • they could quickly convert them to amazon physical stores,

          They don't need to buy JC Penny to do that. They can just lease the vacant space after JC Penny liquidates.

      • Re:perfect environment for predators (Score:5, Informative)

        by phalse phace ( 454635 ) on Tuesday May 19, 2020 @06:16PM (#60080440)

        While JC Penny lease most of their real estate, they do own several hundred of it. And there are some properties that are ground leases, i.e. JC Penny owns the physical building and lease just the land it's on. They also own their distribution centers.

        JC Penny's distribution centers would allow Amazon to inexpensively expand their 1-2 day Prime delivery service to more areas.

        JC Penny stores could be used as order pick-up and return drop-off locations too. They don't have nearly enough Whole Foods locations throughout the U.S. for customers to pick up orders from, and Amazon could end/pull out of their agreement with Kohl's to use their stores as return locations [marketwatch.com].

        Why drive sales at Kohl's from people who drop off Amazon returns there? Buy JC Penny, stock the stores with higher margin Amazon products (Amazon has a lot of private-label brands [businessinsider.com], with more than half of it comprising men's, children's and women's [businessinsider.com] clothing [jetsetter.com] which seems to be pretty popular [whowhatwear.com].... women are JC Penny's core demographic [bizjournals.com]), have customers pick up and return merchandise to JC Penny locations instead of Kohl's, and while they're there, maybe they'll buy something else.

        Besides, I'm sure Amazon will find some use for the sales and customer data.

        • Re: (Score:3, Informative)

          by nytmare ( 572906 )

          I don't get why everyone misspells it "Penny". I mean the store's been around for decades, and its name is right there in the headline for you to reference.

      • $500 million - $3.5 billion of real estate (Score:5, Insightful)

        by raymorris ( 2726007 ) on Tuesday May 19, 2020 @06:18PM (#60080444) Journal

        JC Penney's real estate is worth somewhere between $500 million - $3.5 billion.

        Some of it they own. Some they have long-term leases at sweet rates. The mall operators in Simon gave cheap rates to the anchor stores which make a mall a mall, then made their money on the food court operators, Sunglass Hut, Hot Topic, etc. Simply because if they didn't have at least two of the five department store brands, they wouldn't have a mall. So those leases have value as a lot of real estate for a cheap price.

      • You aren't buying a supply chain since any of their suppliers will be happy to sell directly to Amazon.

        Arizona Jean Company
        Stafford
        Worthington
        Liz Clairborne handbags

        JC Penny owns a handful of fashion brands that have some name recognition. Amazon buys up the designers, the manufacturing contracts, and the inventory and adds it to their Amazon Basics line. Amazon Basics Jeans from Arizona Jean Company. Amazon Basics Luggage from Liz Clairborne etc...

    • You talk about predators, when you list two dangerous entities... is your post supposed to be a rip-off of this poster [ssl-images-amazon.com]?

    • In other news, Dracula offers to take over and care for cash strapped orphanages.

  • It seems there's a great business opportunity for Amazon in that you walk into a JC-Penney-type store to pick up or drop off Amazon packages/returns. The pick-up/drop-off is toward to back so that customers browse stuff while going in and out. There's still an excitement to seeing stuff physically when you stare at screens all day. And they could have staples like socks, sweats, T-shirts, booze, etc.

  • Great! Whenever I need 2 day shipping... (Score:5, Funny)

    by AmazingRuss ( 555076 ) on Tuesday May 19, 2020 @05:35PM (#60080332)
    ... on stuff I haven't wanted or needed since the 80's, Amazon will have me covered.

    • Re:Great! Whenever I need 2 day shipping... (Score:5, Funny)

      by 93 Escort Wagon ( 326346 ) on Tuesday May 19, 2020 @05:44PM (#60080358)

      Don't be so dismissive regarding this deal. Amazon may be onto something. I buy stuff online pretty regularly nowadays, but I am old enough to remember shopping in malls - and at JC Penney specifically. You know what's glaringly missing from today's online ordering experience? Muzak.

      Yes, you heard me.

      Now imagine your pleasure as you browse amazon.com while, in the background, the instrumental versions of easy-listening hits from the 60s and 70s play softly through your speakers.

      Awesome!

      • Re:Great! Whenever I need 2 day shipping... (Score:4, Insightful)

        by quonset ( 4839537 ) on Tuesday May 19, 2020 @06:10PM (#60080428)

        You know what's glaringly missing from today's online ordering experience?

        Being able to try on multiple pairs of pants to see which ones fit and feel the best without having wait for it to be delivered? Being able to see and feel a shirt without having to wait for it to be delivered? Being able to immediately know if a shoe fits? Being able to look for defects in the product before buying? Being able to buy something immediately without having to wait?

        Help me out here. Am I close?

        • Re:Great! Whenever I need 2 day shipping... (Score:4, Funny)

          by 93 Escort Wagon ( 326346 ) on Tuesday May 19, 2020 @06:24PM (#60080466)

          Help me out here. Am I close?

          Nope. It's definitely Muzak.

        • We've been told so often that "storefronts are going away", but that's only half true. Some of them will going away, but there will always be storefronts to some degree, there are things that really can't be done online... Yes, trying clothes is the big one. But also musical instruments. Smelling a perfume. Feeling a chair or a mattress. The JC Penney brand covers half of those already, they could add in the others, plus an Amazon counter for returns. There's also that segment that demands to have a "custom

        • Re: (Score:2)

          by AmiMoJo ( 196126 )

          Online clothes retailers let you order a couple of sizes, try them and send the one you don't want back easily. Many people actually prefer it as they can try clothes in the comfort of their own homes and paired with other clothes they already have.

          Personally I tend to buy jeans with stretchy comfortable fabric these days (Uniqlo ones are great) so exact fitting isn't too important. Because I lack fashion sense and imagination I just buy 2 or 3 pairs of the same ones, maybe different colours maybe not.

        • Help me out here. Am I close?

          Not really, no. Learn about Zappos and returns

      • Re:Great! Whenever I need 2 day shipping... (Score:4, Funny)

        by PolygamousRanchKid ( 1290638 ) on Tuesday May 19, 2020 @06:27PM (#60080474)

        Don't be so dismissive regarding this deal. Amazon may be onto something. I buy stuff online pretty regularly nowadays, but I am old enough to remember shopping in malls - and at JC Penney specifically. You know what's glaringly missing from today's online ordering experience? Muzak.

        Yes, you heard me.

        Now imagine your pleasure as you browse amazon.com while, in the background, the instrumental versions of easy-listening hits from the 60s and 70s play softly through your speakers.

        Awesome!

        Take a listen to this while browsing the Amazon pages:

        Easy Listening Mall Muzak [youtube.com]

        Oh, and you need the smells of the Four Major USDA Mall Food Groups: Fat, Sugar, Alcohol and Caffeine.

        Amazon might offer an enticing "Mall Odor" aroma spray for that . . .

        I also see to remember screaming kids in the mall, but I was the one doing the screaming.

      • Re: (Score:2)

        by dgatwood ( 11270 )

        You know what's glaringly missing from today's online ordering experience?

        Only having the product in the least popular sizes because the popular sizes sold out in the first week of the season?

      • You also missing the dressing room. Not everyone comes in standardized sizes, and not even clothes come in standardized sizes really, you have to try it to see if it fits. I hate shopping at brick and mortar stores; but I hate shopping online too, and I hate returning items. So I go to the brick and mortar stores.

      • I know you are being modded funny, but modern retailers will never approach the environment or character of those 80s stores around Christmas time.

        Everything had decorations, holiday music was playing, new toys for all ages everywhere. There were interactive (working) displays for most items for sale instead of mindless warehouse aisles of boxes with a price sticker on the shelf. It was an experience, it had flavor.

        Now it is click picture and ship. So long Sears, Strawbridge and Clothier, Toys R US, an

        • I know you are being modded funny, but modern retailers will never approach the environment or character of those 80s stores around Christmas time.

          Everything had decorations, holiday music was playing, new toys for all ages everywhere. There were interactive (working) displays for most items for sale instead of mindless warehouse aisles of boxes with a price sticker on the shelf. It was an experience, it had flavor.

          Macy's and Nordstrom's still do that, though their display designers have been infected with Applie-itis so they're all weak and minimalistic, and even if they wanted to do better they obviously had no budget. The florid flair of the 80s decorations is pretty much gone.

          I admit, I miss it, just a little. Christmas had a very solid fruity bottom in those years.

          Now that you mention it, I'm a little surprised that the surviving high end department stores aren't hearkening back to those days a bit more. Conve

      • Re: (Score:2)

        by Kaenneth ( 82978 )

        ...

        "Alexa play instrumental 80's hits"

    • Amazing! I'm still boycotting Amazon unless I'm forced to go there because of some obscure gift list item.

    • Re: (Score:2)

      by AmiMoJo ( 196126 )

      Shopping was more interesting back in the 80s. There was a mall in the city centre that had a lot of random independent shops, not just the same chains that they have everywhere else.

      You could find lots of interesting stuff there, but now it's all gone and the mall is almost dead. Half empty, some big stores pulled out and I expect after C19 it won't survive long. There's no reason to go there any more, they have the same shops at a retail park with free parking and easier access.

      One of the reasons I love s

    • when you're starting out in life. Kind of like Mervyn's before they got Bained. They will be missed.

      And it sucks to see Amazon hoovering up companies. It means less competition and higher prices. This keeps happening, and it's one of the reasons real wages are dropping. You get price inflation from market consolidation.

  • JC Penny Did Online Shopping Before the Internet (Score:5, Interesting)

    by davide marney ( 231845 ) on Tuesday May 19, 2020 @06:37PM (#60080502) Journal

    My first job while still in college was running the catalog department of the JC Penny store in Silver Spring, MD. Customers were mailed catalogs, and they would call into the local store to place their orders. We keyed those orders in real time on a teletype machine, received the shipments on a truck a few days later, and then called the customer back to let them know it had arrived. This was a big time saver for the customer. They could order remotely and inspect it right in the store -- they could even try on clothing they had ordered using the store's changing rooms. If they didn't like it, they just didn't accept it. No questions asked. No re-boxing to ship back to the retailer. No trips to the UPS store.

    This was decades ago. Of all retailers, I think JC Penny understands better than most the value proposition of moderate-to-good quality at a moderate price-point and shopping convenience. There could be a lot of synergy with Amazon, corporately. The two businesses are not that far apart.

    • Jeez, something I haven't thought of in years. Around 1980, when 1200 baud modems were the new thing, a guy I knew via a BBS said "call this number". I called it and was given a, menu is too kind, a way to order stuff. I ordered myself, I don't remember, a refrigerator (keep in mind, I'm about 21 years old renting an apartment). I was at the point of the 1980 equivalent to "Accept" when I chickened out and hung up.

      It was for Montgomery Wards, who I'm guessing half the people here have never heard of.
  • In Santa Barbara, the local Alexa team recently renovated and moved into the building that used to house JC Penny...

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