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J. C Penney to close 33 underperforming stores, 2,000 jobs at risk

RBR Staff Writer Published 16 January 2014

J. C Penney, a chain of American mid-range department stores, announced that it will close 33 under-performing stores and lay off 2,000 employees as it struggles to regain profitability.

JC penny

The Plano, Texas-based company said the closure and lay offs will help the company to focus more on potential growth areas. Store closures are expected to save about $65m a year, beginning in 2014.

However, the closures and job cuts will also result in pre-tax charges of about $26m in the fourth quarter and $17m in future periods.

The stores, to be closed, are majorly located in small markets at regional malls that most likely have declining visitors.

J. C Penney chief executive Myron Ullman said, "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," Ullman added.

The company noted that remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May.

Meanwhile, the company is continuing its plans to open a new store later this year at the Gateway II development in Brooklyn.

As part of cost cutting, the company is also seeking to combine its Midwest and North regions, eliminating some merchandise planning and store positions as well as central office and administrative jobs.

J. C. Penney is a holding company, involved in operating department stores across the US and Puerto Rico. The company's product offerings include a comprehensive range of apparel, footwear, accessories, jewelry, beauty products and home furnishings.

These products are sold under various brands such as Worthington, Every Day Matters, Okie Dokie, St. John's Bay, The Original Arizona Jean Company, and Decree. Additionally, it provides services such as portrait photography, styling salon, optical and custom decorating.

 

Image: JCPenney in Aventura Mall in Aventura, Florida. Photo: Courtesy of Aranda56.