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 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,

Catalyst Brands combines Sparc Group brands Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand, and Nautica with JCPenney and its private label brands, Stafford, Arizona and Liz Claiborne.

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 merging with a company that owns a number of other once-bankrupt clothing stores, including Forever 21 and Brooks Brothers, to form a new company that will hold significant sway over the future of America’s malls.