JC Penney Plans to Close Almost 140 Stores This Year
San Angelo, TX - JC Penney Company, Inc. announced that it’s implementing a plan to optimize its national retail operations. The company is expected to close two distribution facilities and approximately 130-140 stores over the next few months.
The distribution centers are located in Florida and California.
This decision will help align the company’s brick-and-mortar presence, according to a JC Penney news release.
“In 2016, we achieved our $1 billion EBITDA, (Earnings before interest, tax, depreciation and authorization), target and delivered a net profit for the first time since 2010; however, we believe we must take aggressive action to better align our retail operations for sustainable growth,” said Marvin R. Ellison, CEO of JC Penney.
Tod Herring, General Manager at the store in Sunset Mall, gave his perspective on the new operations, and what it means for the store.
“This will be a quick action,” Herring said. “That way it won’t be strung out over the whole year.”
He talked about the company’s plans to improve stores by investing in Sephora Salons being displayed in the center of store locations.
Herring believes stores that are not able to move towards this investment are more susceptible to being on the closing list.
The Sunset Mall location has plans to begin construction of a Sephora Salon area in the next month.
“It gives me great calm for myself, as well as our entire store team,” Herring said. “With the company’s investment in Sephora at the end of June, I feel extremely confident that the company would not make that investment then close [our] store.”
The press release also talked about the concern of employees being cut because of these closures. The company is prepared to offer approximately 6,000 employees the option for early retirement.
“We understand that closing stores will impact the lives of many hard working associates, which is why we have decided to initiate a voluntary early retirement program for approximately 6,000 eligible associates,” Ellison said.
By timing these closures with the early retirement incentive, the company expects to see a net increase in the hiring of full-time associates so it will far exceed the number of positions affected by the store closures.
“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers,” Ellison added. “Maintaining a large store base gives us a competitive advantage in the evolving retail landscape since our physical stores are a destination for personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services.”
Those employees who are affected by the closures will receive separation benefits, which includes assistance identifying other employment opportunities and outplacement services such as resume writing interview preparation.
The final list of the stores closing won’t be released for a couple of weeks, Herring said.
After notification, all impacted stores are expected to close in the second quarter of 2017, according to the JC Penney press release.