In a development that underscores the ongoing struggles of America's legacy department store chains, JCPenney's nearly $1 billion property deal has officially fallen through, leaving 119 store locations in limbo and raising fresh questions about the 123-year-old retailer's path forward.

The collapse came after private equity firm Onyx Partners Ltd. failed to complete its $947 million all-cash acquisition of JCPenney store properties by the December 26, 2025 deadline. Copper Property CTL Ltd., the trust that holds the properties, issued a termination notice after months of repeated delays pushed the deal past its original September 8 closing date.

A Deal That Never Closed

The transaction, first announced in July 2025, was intended to provide JCPenney with a significant capital infusion while allowing Copper Property to exit its position in retail real estate. The trust had been under pressure to sell all properties by January 2026, making the Onyx deal crucial to its business plan.

According to a Form 8-K filing dated December 22, Copper Property confirmed it would terminate the agreement if the buyer did not complete the transaction by December 26. When that deadline passed without closure, the deal was officially dead.

"The repeated delays and ultimate failure to close raises serious questions about the underlying value of these retail properties in the current market environment."

— Retail industry analyst, speaking on condition of anonymity

Neither JCPenney nor Onyx Partners has issued public statements explaining why the deal collapsed. Industry observers speculate that financing challenges or concerns about the long-term viability of mall-based retail may have contributed to the buyer's hesitation.

The Bankruptcy Shadow

The failed sale traces its origins to JCPenney's Chapter 11 bankruptcy filing in May 2020. While the company blamed the COVID-19 pandemic for pushing it into insolvency, the iconic retailer had not posted a profit in nearly a decade prior to the filing. High debt levels, changing consumer preferences, and intense competition from e-commerce had already eroded its position.

JCPenney emerged from bankruptcy in December 2020 with new ownership, reduced debt, and approximately 200 fewer stores. But the restructuring merely bought time rather than solving fundamental business challenges.

Today, JCPenney operates over 650 stores across the United States and Puerto Rico, employing more than 50,000 workers. The company closed eight store locations in 2025 and has already announced at least one additional closure in 2026—its Stoneridge Mall location in Pleasanton, California, which will shutter on February 22.

119 Stores Face Uncertain Future

The failed transaction leaves 119 JCPenney locations in an uncomfortable state of uncertainty. While the stores remain operational, the lack of a clear ownership resolution for the underlying properties creates complications for long-term planning and investment.

Real estate analysts note that mall anchor stores like JCPenney face a particularly challenging environment:

  • Mall traffic: Foot traffic at enclosed shopping malls remains 15-20% below pre-pandemic levels
  • Anchor economics: Large anchor stores often pay below-market rents in exchange for drawing shoppers to smaller tenants
  • Conversion challenges: Converting 150,000+ square-foot department stores to alternative uses is expensive and complex
  • E-commerce pressure: Online shopping continues to capture market share from physical retail

The Broader Retail Picture

JCPenney's struggles mirror those across the traditional department store sector. Macy's has closed dozens of locations in recent years, while Nordstrom has explored going private to escape public market pressures. Saks Global, the parent company of Saks Fifth Avenue, recently saw its CEO exit amid bankruptcy speculation.

The sector's troubles have accelerated mall vacancies nationwide, forcing property owners to reimagine their spaces with alternative tenants like fitness centers, medical offices, and entertainment venues. But these conversions require significant capital and often produce lower rental income than traditional retail.

What Comes Next

For JCPenney's 50,000-plus employees and the communities that depend on its stores, the failed deal adds another layer of uncertainty to an already precarious situation. The company has remained tight-lipped about its strategy for the 119 affected properties.

Copper Property will likely seek alternative buyers or explore other exit options, though the failure of such a large, negotiated deal suggests the market for legacy retail real estate remains challenging.

As America's retail landscape continues its ongoing transformation, JCPenney's property saga serves as a reminder that even multi-hundred-million-dollar deals can fall apart—and that the future of traditional department stores remains anything but certain.