Skip to main content
Publish date:

Why JC Penney Is Key as Sears Files For Bankruptcy

See what JC Penney could get out of Sears' bankruptcy.

If you're checking out the Sears news, you should also check out JC Penney Company Inc. (JCP) - Get J. C. Penney Company, Inc. Report

Sears Holding Corp.  (SHLD) filed for bankruptcy late Sunday night Oct. 14. And instead of seeking an outright sale of the entire company, which, had there been a buyer, would have been to the delight of shareholders, it's likely the crashing retailer will liquidate tons of inventory.

That could be to the delight of JC Penney. 

TheStreet Recommends

TheStreet's Zev Fima, analyst for Jim Cramer's Action Alerts Plus team, says JC Penney could be right in the middle of the sweepstakes for Sears inventory. JC Penney could buy tons of Sears inventory at a steep discount to market, which could act as at least somewhat of a tailwind to its margins. 

JC Penney is yet another brick-and-mortar retailer that has suffered at the hands of Amazon (AMZN) - Get, Inc. Report and broader e-commerce. Its market cap is now at $525.88 million, a far cry from where it was before the e-commerce boom. Now, the retailer is strapped with debt, and struggling to keep its head above water

The AAP team actually has Kohl's Corporation (KSS) - Get Kohl's Corporation (KSS) Report in its portfolio partly because it has used Amazon to nits advantage. 

Amazon and Kohl's are holdings in Jim Cramer's Action Alerts PLUS member club. Want to be alerted before Jim Cramer buys or sells AMZN or KSS? Learn more now.