J.C. Penney's announcement on Monday that it is changing its corporate structure to a holding company, has led to analyst wondering if the company may spin off its Eckerd drug store chain.
The spin off possibility "is speculation from the market," said Penney spokesperson Stephanie Brown. "We've not said that's what we're doing."
The Plano, Texas, marketer has changed to a holding company format. It is now known as J.C. Penney Corp. Inc., from J.C. Penney Co. Inc. The change went into effect on Sunday.
"The new structure gives us flexibility in rebuilding our business," Brown said. "As far as what the future holds, I can't comment on that."
Penney has long been speculated to scuttle the drug store chain. Last May, analysts reported that Penney was expected to put the chain up for sale or plan an initial public offering in the next two or three years. This would allow Penney to focus on its core catalog/retail businesses. In 2000, the company thought about an initial public offering for an Eckerd tracking stock, but called it off.
Drug store sales in January met company expectations.
Penney purchased Eckerd in 1996 for about $3.3 billion, including $760 million in debt.
