JCPenney Announces Store Closings As Part Of Growth Plan
By Christine Kern, contributing writer
Chain set to reduce store fleet by 33 stores, cut 2,250 jobs, to improve profitability.
JCPenney has announced that it will shutter approximately 33 more stores this year, eliminating some 2,000 jobs, in a move designed to improve the chain’s overall profitability, according to Daily Finance. The move reduces its store fleet to about 1,060 stores, and the closings are set to take effect by April 4. The closings represent about 4% of the middle-market chain's stores.
This might seem to be a startling move, given the latest figures from JCPenney that showed a significant rise in sales during the holiday shopping season. Comparable sales rose 3.7% in November and December, resulting in a boost to Penney’s shares of 20 percent. The company has struggled to recover from the leadership of former CEO Ron Johnson, who initiated a radical rebranding of the company that was not well-received by the public.
"We continually evaluate our store portfolio to determine whether there's a need to close or relocate underperforming stores,'' said company media relations manager Sarah Holland, according to KSDK News. "Reviews such as these are essential in meeting our long-term goals for future company growth. While it's never an easy decision to close stores, especially due to the impact on our valued associates and customers, we feel this is a necessary business decision."
The closings affect many leased locations and stores in bad locations, and the move is designed to bring the fleet size into proper alignment with its annual sales projections and balance its ecommerce sales. The reductions are anticipated to create an annual cost savings of approximately $65 million for the company. The closings affect stores in Georgia, Iowa, Illinois, Indiana, Massachusetts, Michigan, North Carolina, New Jersey, New York, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Texas, Virginia, Vermont, and Wisconsin. Please click here to access the list of the planned store closures.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," Myron E. (Mike) Ullman, III, chief executive officer of JCPenney, said in the release. "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."