JCPenney closing up to 140 stores, cutting jobs
- Author: Larry Hoffman Feb 25, 2017,
Feb 25, 2017, 4:46
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.
In a news release, the company says it delivered a net profit in 2016 for the first time since 2010.
Following the news, shares fell by around 4 percent as investors hedged their bets on a slim recovery by the once-iconic Main Street retailer.
On Thursday, fellow retailers Macy's and Kohl's Corp. reported lower revenue and comparable-store sales, a key retail metric that removes the sales impact of recently opened or closed stores.
Penney spokeswoman Sarah Holland said Friday that the locations of the stores marked for closure won't be released until mid-March. It's offering early retirement to approximately 6,000 workers who are eligible to retire.
In a Fortune profile a year ago, Ellison said that nearly all Penney stores generated more cash than they consumed. Penney added those capabilities to its stores a year ago.
J.C. Penney Co. Inc. has rejoined the trend of big-box department stores reducing their brick-and-mortar footprint. Last year, 75 percent of Penney's online orders "touched a physical store", he said.
JCPenney closed its Huntsville store in late January at Madison Square Mall and has not announced plans to reopen elsewhere.
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".
Ellison said the Plano, Texas-based company decided that coordinating a voluntary early retirement program with the store closures could lessen the effect on employees. "Is-the-department-store-era-ending-video" class="local_link" target="_blank">Macy's, Sears, and Kohl's, also announced store closings. Almost all of the closures are expected to occur in the second quarter of 2017.
Analysts say many shoppers are also looking for bargains, with stores like TJMaxx, Ross and Burlington also doing well.