Penney's Mulls Sale Of Headquarters To Infuse Capital Into Company
By Christine Kern, contributing writer
Consideration is part of plan to cut costs and reinvigorate retail chain.
J.C. Penney Company, Inc. has announced plans to investigate the sale and partial leaseback of its headquarters in Plano, Texas as part of its ongoing initiative to reduce outstanding debt and reduce expenses, according to a company statement.
“With the tremendous growth and development currently taking place within Plano and North Texas, there’s no better time to take advantage of this lucrative market by pursuing a sale of our Home Office real estate,” explained JCPenney CEO Marvin R. Ellison. “Even as we continue to deliver positive financial results across all aspects of our business, including delivering year over year gross margin increase in the fourth quarter, this present an ideal opportunity to reduce outstanding debt and create long-term savings for the Company.”
JCPenney has been focused on initiatives to bring the retailer back to its earlier glory days, including an emphasis on ecommerce, reorganization of C-Suite officers, and the resurrection of its print catalog to boost internet sales. In January 2015, the retail giant also announced the closure of 33 stores and the elimination of 2,250 jobs in order to improve profitability.
The company suffered major setbacks and acquired large amounts of debt under the leadership of CEO Ron Johnson, leading to the latest efforts to reinvigorate the retailer.
The sale of the headquarters in Plano would benefit the company overall, as the cost of leasing space inside the building would be offset by the reduced maintenance costs, and property taxes. Reduced interest payments would also result, since the proceeds from the sale would go to paying down outstanding debt.
JCPenney has occupied the three-story office building as its global headquarters since its completion in 1992. Situated on a 64-acre site near the intersection of Dallas North Tollway and State Highway 121, the Legacy corridor is home to corporate and regional headquarters for numerous Fortune 500 companies.