JCPenney Merges With Sparc Group

JCPenney (Plano, Texas) and Sparc Group announced they have combined to form a new organization, Catalyst Brands, which oversees six retail banners “that celebrate the essence of American style,” they said in a news release.

Catalyst Brands brings together Sparc’s brands Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand and Nautica with struggling department store chain JCPenney and its private brands, including Stafford, Arizona and Liz Claiborne.

“The word ‘catalyst’ reflects our drive to accelerate innovation and energy and amplify the impact of this powerhouse portfolio,” said Marc Rosen, formerly CEO of JCPenney and newly named CEO of Catalyst Brands. “Together, we bring scale, expertise and broad appeal to customers across America.”

Catalyst Brands launches with more than $9 billion of revenue, 1800 store locations, 60,000 employees and $1 billion of liquidity. With offerings that include business and formal fashion from Brooks Brothers; casual apparel for teenagers and young adults from Aéropostale; outdoor recreation clothing and gear from Eddie Bauer; to everyday style for families from JCPenney and more, Catalyst Brands’ backers say the organization has expansive reach across market and customer segments.

“Catalyst Brands will integrate complementary strengths, including strong product design and sourcing capabilities, deep supplier relationships and a growing use of data-driven and AI technology to enhance its supply chain and inventory management capabilities and to deepen consumer relationships,” the news release notes.

The combined Catalyst Brands organization is a joint venture formed in an all-equity transaction between JCPenney (which operates about 650 stores, down from the peak of 2053 stores it had in 1973) and Sparc, with shareholders Simon Property Group, Brookfield Corp., Authentic Brands Group and Shein.

In addition, Catalyst Brands said it has sold the U.S. operations of Reebok (but did not reveal the buyer) and is exploring strategic options for the operations of its Forever 21 unit.