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,

Zoom in: Catalyst was formed via an all-equity transaction between the department store chain JCPenney and Sparc Group's shareholders Simon Property Group, Brookfield Corporation, Authentic Brands Group and Shein. JCPenney CEO Mark Rosen will lead the new Plano, Texas-based entity.

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 and SPARC Group, which holds a portfolio of brands including Aéropostale, Brooks Brothers, Eddie Bauer, Lucky Brand and Nautica, have formed a joint venture in an all-equity transaction to create Catalyst Brands. The new company launches with more than $9 billion in revenue, 1,800 store locations and 60,000 employees.