JC Penney to shut 130-140 stores; quarterly sales drop
- Author: Zachary Reyes Feb 25, 2017,
Feb 25, 2017, 3:13
Ellison said he believes JCPenney's store presence remains relevant as it relates to its focus on beauty, home refresh and special sizes products that "generated significantly higher sales, and a more vibrant in-store shopping environment". J.C. Penny will also close two distribution centers, in Lakeland, Fla. and Buena Park, Calif.
The retail company will offer early retirement packages for some of its employees.
The department store said on Friday that store closings constitute about 13 or 14% of the company's physical footprint but less than 5% of its total sales.
The Limited closed its remaining stores last month, and American Apparel, which filed for bankruptcy for a second time previous year, is expected to close all its stores.
J.C. Penney, No. 33 in the Internet Retailer 2016 Top 500 Guide, announced the closings Friday ahead of releasing its fiscal fourth quarter 2016 earnings. J.C. Penney expects annual cost savings of about $200 million from the actions.
J.C. Penny is joining a growing list of brick-and-mortar businesses scaling back operations by closing unprofitable stores that include Sears and K-Mart which announced the closing of 150 stores last month, and Macy's, closing 68 stores and cutting 10,000 jobs, reports CNN Money.
"While any actions that reduce or exclude our presence in communities across the country is always hard, it is essential that JCPenney continues to evolve in order to achieve long-term growth and profitability and deliver on shareholder value", J.C. Penney's chairman and chief executive Marvin R. Ellison said in the release.
J.C. Penney said it could see additional challenges in the year ahead.
Payless Shoes is closing up shop at a thousand stores this year. Analysts polled by Zacks expected $3.97 billion in revenue.
The news came as the retailer posted its first full-year profit since 2010, earning $1 million for the fiscal year ended January 28 vs. a $513 million loss for the same period a year ago. Nordstrom Inc., the department store recently scolded by President Donald Trump, reported late Wednesday a better-than-expected quarterly profit with help from strong sales online and at Nordstrom Rack.
Ellison said the company decided that coordinating a voluntary early retirement program with the store closures could lessen the effect on employees.
The fate of Alton's location - the last remaining anchor store at Alton Square Mall - is uncertain in light of the announcement.
"This year was not without its challenges, particularly in our women's apparel business, but I am proud this team delivered on our goal to return our company to profitability in 2016", J C Penney Chairman and CEO Marvin Ellison said in a statement.