JCPenney announces merger with SPARC Group

By Pune Media On Jan 10, 2025 21

JCPenney and SPARC Group announced a merger on Jan. 8 to form a new entity, Catalyst Brands.

Catalyst Brands “has broad consumer reach” through its distribution network of owned stores, ecommerce sites and wholesale partners, the new retailer said in a statement detailing the merger.

SPARC Group’s brands include Aeropostale, Brooks Brothers, Eddie Bauer, Lucky Brand and Nautica. JCPenney’s private brands include Stafford, Arizona and Liz Claiborne.

Catalyst Brands plans to integrate its product design, sourcing capabilities, supplier relationships and growing use of data-driven and AI technology to enhance its supply chain and inventory management capabilities.

JCPenney and SPARC Group merger forms Catalyst Brands

Catalyst Brands launches with more than $9 million in revenue, the new company announced.

Additionally, it has 1,800 physical store locations, 60,000 employees and $1 billion of liquidity, Catalyst Brands said.

The newly formed Catalyst Brands is a joint venture formed in an all-equity transaction between JCPenney and SPARC Group, it said. Its shareholders include Simon Property Group, Brookfield Corporation, Authentic Brands Group and Shein.

Many of these brands rank in the Top 1000 Database. The database is Digital Commerce 360’s ranking of the largest North American online retailers by their annual ecommerce sales. Furthermore, only two conglomerates, Berkshire Hathaway and Sycamore Partners, own more Top 1000 retailers than Authentic Brands group.

In July, Shein launched a €200 million Circularity Fund in the United Kingdom and European Union that it said is committed to investing in environmental, social, and governance (ESG) efforts. Shein said it will invest in British and European brands, designers, and artisans to grow their online businesses. Shein also ranks No. 83 in the Global Online Marketplaces Database. The Digital Commerce 360 database ranks the largest such marketplaces by their annual third-party gross merchandise value (GMV).

JCPenney, prior to the merger with SPARC Group, ranked No. 38 in the Top 1000. Aeropostale ranked No. 281, Brooks Brothers No. 254, Eddie Bauer No. 152, and Lucky Brand No. 600.

Some of those retailers and more fall under Authentic Brands Group’s portfolio. Others include Arrow, Billabong, Champion, Element, Juicy Couture, Nine West, Prince, Quiksilver, Sperry, Spyder, Tapout and Van Heusen — some of which also rank in the Top 1000.

Catalyst Brands said it has sold the U.S. operations of Reebok and is “exploring strategic options” for Forever 21’s operations.

Who will run Catalyst Brands?

A mix of retail executives are taking on leadership positions at Catalyst Brands. Former JCPenney CEO Marc Rosen has become the chief executive for Catalyst Brands, it said.

“Catalyst Brands brings together the rich heritage of six unique brands with modern energy and a new vision for success,” Rosen said in a statement. “The word ‘catalyst’ reflects our drive to accelerate innovation and energy and amplify the impact of this powerhouse portfolio. Together, we bring scale, expertise and broad appeal to customers across America.”

Additionally, three brand CEOs overseeing the portfolio will report to Rosen: Michelle Wlazlo, Natalie Levy and Ken Ohashi.

Catalyst Brands has promoted Wlazlo, who was the chief merchandising and supply chain officer of JCPenney, to be JCPenney’s brand CEO. Levy will continue her role as brand CEO of Aeropostale, Lucky Brand and Nautica. Ohashi will continue leading Brooks Brothers and has assumed responsibility of Eddfor Bauer in his new role as brand CEO of both retailers.

Kevin Harper, a former Walmart executive, joins Catalyst Brands as chief operating officer. Marisa Thalberg, previously chief marketing and brand officer at JCPenney, is now chief customer and marketing officer for Catalyst Brands.

Other Catalyst Brands leadership appointments include:

Aimee Carroll, executive vice president of wholesale, B2B and business development
Andre Joyner, executive vice president and chief human resources officer
Barbara Fevelo-Hoad, chief sourcing officer and the SPARC and integration lead
Chad Duennes, senior vice president of supply chain
Glen Morris, executive vice president and chief legal officer
Jim DePaul, executive vice president of stores
Kevin Harper, executive vice president and chief operating officer
Keith Melker, executive vice president and chief financial officer
Mike Dupuis, senior vice president and chief digital officer
Sharms Balasubramaniam, senior vice president of technology
Wayne Milano, senior vice president of sourcing

Recent retail mergers and acquisitions

Other department stores and retailers have recently sought mergers, acquisitions and investments, some of which were finalized while others have fallen through.

At the end of 2024, Saks Global completed a $2.7 billion acquisition of Neiman Marcus Group, combining the luxury retailers under one corporate umbrella. Equity contributions from Amazon and Salesforce helped fund the transaction.

Around the same time, the Nordstrom family completed a $6.25 billion all-cash deal to take their namesake retail brand private. Under the agreement, the family will own 50.1% of the company, while partner Mexican retailer El Puerto de Liverpool will own the remaining 49.9%.

Meanwhile, Macy’s investors are pushing for the brand to explore options with its real estate and sub-brands Bloomingdale’s and Bluemercury. The move came ahead of Macy’s most recent quarterly earnings results and at the end of a year in which Macy’s dealt with a takeover effort by Arkhouse Management and Brigade Capital Management.

On different sides of the retail industry, Variety Wholesale will acquire hundreds of stores from Big Lots, which recently filed for bankruptcy. And Beyond Inc., whose brands include Overstock, Bed Bath & Beyond, Baby & Beyond, and Zulily, said a deal to invest in The Container Store might not happen. However, Beyond is investing $25 million in a deal with Kirkland’s to put Bed Bath & Beyond’s brand and products back into physical stores.

All of that comes as a federal judge blocked a long-pending Kroger-Albertsons merger, after which Albertsons announced a lawsuit against Kroger. Kroger had put together a $25 billion proposal to buy Albertsons. The deal spent almost two years winding its way through the regulatory and judicial systems.

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