J.C. Penney plans to close about 130 stores nationwide

CLEVELAND, Ohio --  J.C. Penney Co., Inc. announced today, as part of its plan to optimize its national retail operations and return to profitability, that it plans to close 130 to 140 stores nationwide, displacing about 6,000 employees. Under the plan,...

J.C. Penney plans to close about 130 stores nationwide

CLEVELAND, Ohio --  J.C. Penney Co., Inc. announced today, as part of its plan to optimize its national retail operations and return to profitability, that it plans to close 130 to 140 stores nationwide, displacing about 6,000 employees. Under the plan,...

24 February 2017 Friday 17:07
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J.C. Penney plans to close about 130 stores nationwide

CLEVELAND, Ohio --  J.C. Penney Co., Inc. announced today, as part of its plan to optimize its national retail operations and return to profitability, that it plans to close 130 to 140 stores nationwide, displacing about 6,000 employees.

Under the plan, the company also expects to close two distribution facilities. The company said it will announce which stores will close in coming weeks, but J.C. Penney has 12 stores in Northeast Ohio:

-- Richmond Town Square in Richmond Heights

-- The Shoppes at Parma

-- Great Northern Mall in North Olmsted

-- SouthPark Center in Strongsville

-- Avon Crossing in Avon

-- Great Lakes Mall in Mentor

-- Market Square at Montrose in Akron

-- Midway Mall in Elyria

-- Chapel Hill Mall in Akron

-- Tri County Plaza in Akron

-- Carnation Mall in Alliance

-- Canton Centre in Canton

"In 2016, we achieved our $1 billion EBITDA 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. During the year, it became evident the stores that could fully execute the company's growth initiatives of beauty, home refresh and special sizes generated significantly higher sales, and a more vibrant in-store shopping environment," said Marvin R. Ellison, chairman and chief executive officer of JCPenney.

"We believe the relevance of our brick and mortar portfolio will be driven by the implementation of these initiatives consistently to a larger percent of our stores. Therefore, our decision to close stores will allow us to raise the overall brand standard of the Company and allocate capital more efficiently.

"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. By coordinating the timing of these two events, we can expect to see a net increase in hiring as the number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures," added Ellison.

"We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers. 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. It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns," said Ellison.

"While many pure play e-commerce companies are experiencing dramatically increasing fulfillment costs, we are pleased with the double digit growth of jcpenney.com and how leveraging our brick and mortar locations is enabling us to offset the last-mile delivery cost. We believe the future winners in retail will be the companies that can create a frictionless interaction between stores and e-commerce, while leveraging physical locations to minimize the growing operational costs of delivery. In fact, in 2016 approximately 75 percent of all online orders touched a physical store. Even with a reduced store count, JCPenney is competitively positioned to deliver a differentiated department store model that meets the expectations of a digital world with an inspiring, tangible shopping environment," Ellison added.

As a result of the store actions, J.C. Penney will close a distribution center located in Lakeland, Florida, in early June, at which time operations will transfer to the company's logistics facility in Atlanta. The company also is in the process of selling its supply chain facility in Buena Park, California.

Associates who will be impacted by the store and distribution center closures will receive separation benefits, which includes assistance identifying other employment opportunities and outplacement services such as resume writing and interview preparation.

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