JCPenney Announces Closure Of As Many As 140 Stores

As part of a plan to optimize national retail operations, JCPenney announced it would close as many as 140 stores in the upcoming months.

According to the retail company, the closures are part of the company’s “return to profitability.” The company anticipates it will close at least 130 stores around the country and two distribution centers.

The plan will allow the company to offset the delivery and fulfillment costs from growing online sales.

In light of the impact closures will have on JCPenney associates, the company is offering an early retirement program. The program is voluntary for the roughly 6,000 eligible associates.

“By coordinating the timing of these two events, we can expect to see a net increase in hiring,” Mavin R. Ellison, chairman and chief executive officer of JCPenney, said in a media release, “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.”

Eligibility for the early retirement program requires associates meet certain age and years of service criteria.

JCPenney projects it will close a distribution center in Lakeland, Fla. in June. The company is also selling a supply chain facility in Buena Park, Calif.

Ellison said the closures will allow the company to raise brand standards as “beauty, home refresh and special sizes generated significant sales.”

“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers,” Ellison said. “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.”

According to the company’s press release, the stores identified for closure will be locations that have minimal cash flow or will require the most significant amount of money to meet the new standard.

The list of full closures is expected to be released sometime in March. Most of the impacted stores are expected to be closed in the second quarter of this year.