Arizona impact unclear as JC Penney closes stores

Department store chain JCPenney said it will close 130 to 140 stores and sever distribution operations at two facilities to better align its store and online operations and better compete with online players.

The company will also close a distribution center in Lakeland, Florida and sell a supply chain facility in Buena Park, California to "monetize a lucrative real estate asset".

The Company plans to notify all affected employees before it releases a full list of planned closures, sometime in mid-March. "Almost all impacted stores are expected to close in May".

JC Penney's total store closures represent about 13-14 percent of its current store base, less than 5 percent of total annual sales, less than 2 percent of EBITDA and 0 percent of net income.

Ellison said that a voluntary early retirement program is being offered to about 6,000 employees. The company says it expects a net incerase in hiring with the number of early retirements exceeding the number of affected full-time positions.

Eillison figures the winning combination will be a "frictionless interaction between stores and e-commerce", while leveraging physical locations to minimize the growing operational costs of delivery. "It is essential to retain those locations that present the best expression of the J.C. Penney brand". The struggling department store operator expects comparable store sales to be between down 1% and up 1% year over year, versus the consensus of a 1.2% increase. Company officials said stores likely to close include relatively low-performing stores or those that would require substantial capital investments to conform to the company's new branding standards.

He did not give details on those efforts except to say they will optimize J.C. Penney's store and digital platforms to create a unique and easy-to-use shopping environment for customers. Adjusted diluted earnings per share, at 64 cents, were 3 cents higher than analysts' estimates. Wall Street had been looking for 81 cents per share and $3.99 billion in sales.

  • Zachary Reyes