JCPenney's Soho dreams dashed

A Manhattan loft where former JCPenney (NYSE:JCP) CEO Ron Johnson once dreamt of throwing rooftop parties atop a swanky downtown loft building is now on the market, as the retailer seeks to shed at least some of the pricey property.

The top floor of 200 Lafayette Street in Manhattan's Soho neighborhood has been put up for lease, according to the New York Post. JCPenney rented the entire seven story former warehouse in May 2012, in a 15-year deal with three five-year options for an estimated worth of roughly $8 million a year.

The property was to serve as the Plano, Texas-based retailer's New York offices where executives could work more closely with the high-profile designers Johnson was busily partnering with.

Johnson's strategy famously failed, he was replaced by former CEO Myron Ullman last spring and the company has been navigating a turnaround ever since. Ullman killed several of the new merchandising initiatives in JCPenney's home department and apparel, reconfigured allocated space to women's apparel and brought back abandoned private label programs.

Ullman's initiatives have yielded early success and in February, the retailer posted its first quarterly profit in more than two years along with a gain in same-store sales. "The most challenging parts of the turnaround are behind us," said Ullman. Those phases required the restoring and strengthening of relationships with suppliers, stabilizing the Penney brand and rebuilding the management structure.

Reining in expenses and regaining the trust of vendors is ongoing and getting out from under financial obligations forged by prior management, including this property, is critical. JCPenney did manage to get out of its commitment for the building's retail space — a 30,000-square-foot three-story facility on the building's basement, ground and second floors — but still rents the fourth, fifth and sixth floors.

For more:
-See this New York Post story

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