JCPenney Store Closings
Late last month, J.C. Penney announced that it would soon begin the process of closing between 130 and 140 of its retail stores. Today, the company released the full list of intended closures.
Spread throughout the country, 138 JCP stores in 41 states will begin liquidating inventory as early as April 17th. The company also plans to close two distribution centers, one in Lakeland, FL and the other in Buena Park, CA.
J.C. Penney Is Another Victim of the Rise of Online Shopping
Like other retail mall giants of the last generation, J.C. Penney retail stores have seen a consistent decline in sales since the early 2000s. Thanks, in part to the rise of ecommerce and online-only vendors such as Amazon, traditional retailers have had to work hard to balance the extraordinary costs of running retail locations with the capital needed to invest in online strategies. So, while the company did manage to deliver a net profit in 2016, it was still not enough to keep all their stores open.
Like Sears and Macy’s, who have also shuttered locations in the past year, JC Penney needs to divert its funds to the new marketplace. As the company’s original press release states,
“These strategic decisions will help align the Company’s brick-and-mortar presence with its omnichannel network, thereby redirecting capital resources to invest in locations and initiatives that offer the greatest revenue potential.”
In other words, JCP stores have suffered from a phenomenon known as “overstoring.” Basically, they run too many physical locations to be profitable in the era of online shopping.
The Job Impact of J.C. Penney Closures
Currently, J.C. Penney plans to close the doors of all 138 retail facilities by June 2017. In total, they expect this move to impact 5,000 jobs nationwide. They do plan to offer job relocation or assistance to retail associates, however. In addition, JCP stated last month that some 6,000 associates would be offered early retirement packages to try to offset the effects of these layoffs.
CEO Marvin Ellison, the man behind J.C. Penney’s strategic plan for the past 18 months, justified the layoffs by stating,
“We understand that closing stores will impact the lives of many hard working associates [but 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.”
Ellison’s plan for aggressive growth has clearly worked, since J.C. Penney achieved its $1 billion EBITDA target in 2016.
Are Stores Near You About to Close?
While the prospect of having to drive further to visit a physical J.C. Penney store may be grim, there is one silver lining to this news: liquidation sales. As stated in the official press release from today, liquidation efforts will begin on April 17. If you are lucky enough to be within a short drive of one of the closing JCP locations, it may be worth it to check out the deals they offer for the next couple months.
Notable closures for our readers include Jacksonville Regional Shopping Center in Jacksonville, FL; Easton Marketplace in Easton, MD; Westfield Sunrise in Massapequa, NY; El Paso Downtown in El Paso, TX; and Tanglewood Mall in Roanoke, VA.
In addition, you can read the full list of closures here.