J. C. Penney announced on Friday, February 24 that it would close about 140 of its stores and two distribution centers over the next several months. Penney is offering a voluntary early retirement program to the 6,000 employees who are eligible to receive it. Many full-time employees are expected to take advantage of the early retirement incentive.
The department store did show a profit in its fourth quarter. That was better than its loss a year ago, but it was not enough to keep the 140 stores opened another year. The list of stores that will close has not been revealed yet.
It is expected that stores around the country will be affected.
Causes of the closings
According to a company report, shares fell to 9 percent on Friday. That means shares are now down to 62 cents. The company's CEO acknowledged that Penney didn't make reasonable choices when it came to product promotions and the use of coupons. Sales and profits have been declining since 2012. After that year, the store focused on selling major appliances and increased its number of in-store Sephora beauty shops. Last year 61 more beauty shops were added. That brought the total to 577, and 77 more will be added this year. Pushing major appliances and the beauty salons helped but not enough to get the store out of its downward spiral.
Penney like other stores
When Penney closes its 140 stores, the company will be able to focus on the remaining stores. The department store intends to push big-ticket items like appliances and become less dependent on sales of clothing. Over 100 major appliance showrooms have already been added.
J.C. Penney is not the only department store that is closing.
It seems to be a trend that other large Department Stores are also closing. At least nine department stores have announced they are closing in 2017. Macy's is closing 15 percent of its stores. That means 100 of its 730 stores will close. Last month, Sears informed employees that 26 of its stores and 70 Kmart stores would close this spring. CVS and Christian Family are also on the list of store closings this year.
