JC Penney store network to be slashed
As America’s department store industry crisis continues, the JC Penney store network is to be culled by 14 per cent.
Of the company’s 1014 stores in the US and Puerto Rico, some 140 will be shuttered – and 6000 staff will be offered redundancy packages.
Like rivals Macy’s, Sears and Kmart, JC Penney is struggling to maintain sales as buyers shun traditional shopping malls in favour of shopping online and niche retailers like TJ Maxx and Forever 21 chip away at traditionally strong department store categories.
At the same time as it streamlines its store network, JC Penney has announced new categories – toys, beauty products, appliances and home goods. With 70 per cent of its customers women and 70 per cent home-owners, the company believes it needs to adjust its product mix to target its core shopper base.
The company will also reduce its strong emphasis on women’s apparel and within that category, its focus on business clothing and formal wear. In their place it will strengthen its offer of athletic and leisure wear, add a plus-sized range and broaden the availability of Adidas and Nike products.
CEO Marvin Ellison told investors on Friday that the company realised its footprint was too large.
He said the closures would allow the retailer to “raise the overall brand standard of JC Penney”.
The store shuttering – together with the closure of two distribution centres – are expected to save the company $200 million in annual operating costs.
JC Penney reported a same-store-sales decline of 0.7 per cent in the fourth quarter, which included the holiday season. Overall net sales were down 0.9 per cent to US$3.96 billion. But it did turn a $131 million loss into a $192 million net profit.