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Private equity firm Sycamore is about to purchase JCPenney and merge it with Belks

The private equity firm that pulled out of a deal to buy Victoria’s Secret in the midst of the coronavirus pandemic seems poised to win an auction to buy JCPenney from bankruptcy, The Post has learned.

New York-based Sycamore Partners has offered $ 1.75 billion to buy the 118-year-old department store chain with plans to merge it with Belks, a source of knowledge of the situation, The Post said.

Sycamore sees JCPenney JCP,
They helped breathe new life into the North Carolina Belks, a struggling 300-store department store chain, mostly in the south, the source said. Sycamore owns Belks and the retailers Talbots, Staples and The Limited.

“JCP is the lifeboat for Belks, which wants to compete nationally with Macy’s,” the source explains.

Also in the running for JCPenney is Saks Fifth Avenue owner Hudson’s Bay Company, who offered $ 1.7 billion, and shopping center operators Simon Property SPG,
+ 2.29%
and Brookfield Property BPY,
+ 1.26%
, which are partnering with a bid of $ 1.650 billion, sources said.

While the deal remains to be approved by the court and by JCPenney’s lenders, creditors and directors, Sycamore has been in the lead since the bids were due on July 22, sources said.

“The bidders were told that Belks / Sycamore had made the strongest offer to acquire JCP,” said a source.

However, a second source noted that all bidders are still in the running. “The three bids are being analyzed and because there is no major difference between the two, it means that all three will see a similar rating,” said this person.

Founded in 1888, both JCPenney and Belks have suffered declining sales from competition from fresher brands and online retailers such as Amazon. JCPenney was also burdened with a $ 5 billion debt when it filed for bankruptcy.

The Sycamore plan involves rebranding approximately 250 JCPenney stores to Belks stores in markets where the two retailers do not overlap. The rest of the JCPenney locations would be liquidated, the source said.

Based in Plano, Texas, JCPenney operated 850 stores when it filed for bankruptcy protection on May 15. In June, it announced plans to permanently close at least 154 stores.

Lisa Harper, CEO of Belks, is said to lead the combined entity. While Sycamore is not interested in keeping the JCPenney brand, it could acquire the rights to the name and sell the intellectual property at a later date, a source said.

Sycamore acquired Belks in 2015. Harper replaced Tim Belks as CEO the following year – it was the first time the family business retail chain had been run by someone outside of the family.

Earlier this year, Sycamore offered $ 1 billion for a majority stake in the iconic but troubled lingerie trader Victoria’s Secret. But the acquisition company squirmed out of the deal in May, claiming that the retailer’s parent company, L Brands, had violated the terms of their deal by closing Victoria’s Secret stores and not paying their rent during the pandemic.

Two weeks later, L Brand’s billionaire founder Retail legend Leslie Wexner retired after 56 years at the helm.

JCPenney and Sycamore declined to comment.

This report originally appeared on NYPost.com.