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J.C. Penney to Close Six Department Stores in April

J.C. Penney Co. Inc. plans to close six department store locations on April 24.

“The decision is the result of a careful and ongoing review of our store portfolio. It’s never easy to close a store, however, we feel this is a necessary business decision,” a spokeswoman for the retailer said Tuesday.

Stores on the chopping block are located at the Southgate Mall in Missoula, Mont., Myrtle Beach Mall in Myrtle Beach, S.C., Chapel Hill Mall in Akron, Ohio, North Hills Shopping Center in Raleigh, N.C., Tulsa Promenade in Tulsa, Okla., and Green Acres Mall in Valley Stream, N.Y.

The store count is far fewer than the 18 department stores and nine home furniture shops the retailer closed in 2019.

Separately, the company also plans to close a call center near Kansas City, according to a WARN filing in Kansas last week that said 243 positions would be eliminated. The WARN–worker adjustment and retraining notification–Act filings require employers with more than 100 employees to provide 60 days of written notice of their intention to lay off more than 50 employees.

On Jan. 9, the mass merchant said comparable store sales for the combined nine-week period ended Jan. 4, 2020, fell 7.5 percent. Adjusted comparable store sales, which exclude the impact of the retailer’s exit from major appliance and in-store furniture categories in 2019, declined 5.3 percent.

Despite the decrease in comparable store sales, the retailer was able to reaffirm financial guidance for full year fiscal 2019. Comparable store sales are expected to be down 7 percent to down 8 percent for the full year. Free cash flow is expected to be positive, J.C. Penney said.

The retailer will post fourth quarter and fiscal 2019 results on Feb. 27, 2020.

Credit ratings firm Moody’s Investors Service earlier this month identified inventory control as the key area where department stores will have to fine-tune performance if they want to see better results this year. Weak holiday sales have only intensified margin pressures, and retail operators in the channel have few options left to offset chronic sales weaknesses and market share losses to other retail channels, the credit ratings firm said.