Sparc Group, the parent company of Forever 21 and Aéropostale, announced it merged with JCPenney to create a new company called Catalyst Brands.

JCPenney is combining with the owner of fellow shopping mall staples Aéropostale and Lucky Brand after a merger of two brand portfolios in an all-equity transaction Wednesday.

JCPenney filed for bankruptcy protection in 2020 and was acquired by Simon Property and Brookfield Asset Management for $800 million.

JCPenney and retail store operator Sparc are merging to form a U.S. retailing behemoth called Catalyst Brands. Why it matters: The new company's owners comprise a consortium of so

JCPenney is joining forces with a large conglomerate to form an even bigger powerhouse in the retail space. The department store chain is teaming up with the Sparc Group in an all-equity merger to form Catalyst Brands,