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Catalyst Brands combines SPARC Group's Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica with JCPenney and its exclusive in-house labels such as Stafford, Arizona, and Liz Claiborne.

The department store chain is teaming up with the Sparc Group in an all-equity merger to form Catalyst Brands, the Wall Street Journal reported. The company will be led by Marc Rosen, who most recently served as the chief executive officer of JCPenney. It will be based in Plano, Texas, where JCPenney is headquartered.

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

JCPenney and SPARC Group today announced that they have combined to form a new organization, Catalyst Brands, creating an unmatched portfolio of six iconic retail banners that celebrate the essence of American style.

The new company, which is exploring its strategic options for Forever 21, is being led by Marc Rosen and expects to grow the brands in its portfolio while producing cost savings.

The department store chain said that the all-equity merger brings its banner and various exclusive private brands under the same umbrella as Sparc’s portfolio, which includes Eddie Bauer, Lucky Brand and Nautica.

JCPenney is merging with a company that owns several other retailers that have also struggled as malls have declined in popularity across the U.S. The 123-year-old department store chain and SPARC Group have combined to form Catalyst Brands,

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