JC Penney explores HQ sale to lower debt
The company hopes the move will reduce its debt
JC Penney has revealed it is exploring the sale and partial leaseback of its headquarters in Plano, Texas, to reduce the US department store retailer's debt and lower its expenses.
The company said favourable market conditions and excess available space within the three-story office building make the move an "attractive real estate opportunity".
By paying down debt with proceeds from the transaction, a reduction in maintenance costs, property taxes and interest expense would offset the cost of leasing space within the building.
"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," said CEO Marvin 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 presents an ideal opportunity to reduce outstanding debt and create long-term savings for the company."
JC Penney has occupied the building as its global headquarters since its completion in 1992.
Last month, the retail chain revealed "strong" Christmas sales thanks to digital sales and merchandise selection, and a focus on private brands. For the nine-week November and December period, comparable store sales increased 3.9%.
The company will report its fourth-quarter and fiscal 2015 results later this month.
In October last year, JC Penney announced plans to axe 300 jobs at its headquarters to help the business meet financial targets and improve productivity.
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