Everything We Know About the JCPenney & Aeropostale Merger

JCPenney and Aeropostale have merged to form a new brand. The merger also features other iconic brands in the portfolio. Let’s look at the details of this newest “super-brand.”

JCPenney, Aeropostale Forms ‘Catalyst Brands’

A press release revealed that JCPenney and SPARC Group, the parent company of Aeropostale, announced their merger to create Catalyst Brands, a portfolio of retail banners that embody the spirit of American style.

Together with JCPenney and its exclusive private brands, such as Stafford, Arizona, and Liz Claiborne, Catalyst Brands combines the brands of the SPARC Group, including Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica. With more than 60 million customers serviced in the last three years, Catalyst Brands has a wide consumer reach thanks to a strong distribution network that includes owned stores, e-commerce websites, and wholesale partners.

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Previously the CEO of JCPenney, Marc Rosen is now the CEO of Catalyst Brands. The portfolio will be managed by three brand CEOs who answer to Rosen. Michelle Wlazlo, who previously served as JCPenney’s chief supply chain and merchandising officer, has been elevated to the position of brand CEO. Ken Ohashi will continue to head Brooks Brothers and has taken up Eddie Bauer’s responsibilities in his new position as brand CEO, while Natalie Levy remains the brand CEO of Aéropostale, Lucky Brand, and Nautica.

Kevin Harper, a former Walmart executive, will become the chief operating officer of Catalyst Brands. Former JCPenney consultancy chief marketing and brand officer Marisa Thalberg is now Catalyst Brands’ chief customer and marketing officer.

“Catalyst Brands brings together the rich heritage of six unique brands with modern energy and a new vision for success. 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,” Rosen said in a statement accompanying the press release.

“For us, customers are at the heart of what we do. We have a shared belief that customers deserve fashion and style of great quality for any and every moment in life. We will leverage our resources and best-in-class industry talent to grow our brands further,” he added.

Not All Corporate Mergers Work Out

JCPenney and Aeropostale’s merger seems to have a bright future. However, not all corporate mergers work out positively, as the recently failed merger between Kroger and Albertsons demonstrated.

Last month, according to Progressive Grocer, Albertsons chose to withdraw from the merger and sue Kroger after it was revealed that the merger between the two companies had been blocked by two different injunctions: one from the King County Superior Court for the State of Washington and the other from the U.S. District Court in Oregon.

According to a statement on the company’s website on Dec. 11, it requests “billions of dollars in damages from Kroger to make Albertsons and its shareholders whole.” This suggests that the legal processes involving these two enormous supermarkets are only beginning.

In reference to the billions in damages, the company stated that it was entitled to $600 million as a termination fee right away and that it would be pursuing additional compensation for the years of work and hundreds of millions of dollars invested in the merger process.

The grocer’s chief policy officer and general counsel, Tom Moriarty, emphasized the motivation for the company’s lawsuit against Kroger.

“A successful merger between Albertsons and Kroger would have delivered meaningful benefits for America’s consumers, Kroger’s and Albertsons’ associates, and communities across the country. Rather than fulfill its contractual obligations to ensure that the merger succeeded, Kroger acted in its own financial self-interest, repeatedly providing insufficient divestiture proposals that ignored regulators’ concerns. Kroger’s self-serving conduct, taken at the expense of Albertsons and the agreed transaction, has harmed Albertsons’ shareholders, associates and consumers. We are disappointed that the opportunity to realize the significant benefits of the merger has been lost on account of Kroger’s willfully deficient approach to securing regulatory clearance,” he wrote.