In the wake of a disappointing holiday quarter, J.C. Penney is slashing hundreds of jobs.
J.C. Penney plans to close 15 additional full-line stores and nine home-and-furniture locations as the retailer struggles to get its footing amid significant challenges for department stores.
The chain announced Thursday that it would close the stores because they are not performing well or “represent a real estate monetization opportunity.”
The company declined to release a list of stores set to close.
J.C. Penney had been reviewing its locations for potential closures as it seeks to cut costs amid a downturn in sales. The retailer had 864 department stores as of Nov. 3, according to a public filing.
The latest move comes after the company had already announced three full-line store closures in January, bringing the total closures for 2019 to 27.
“Comparable sales performance for the closing stores was significantly below the remaining store base and these stores operate at a much higher expense rate given the lack of productivity,” J.C. Penney said in a statement. “Associates who will be impacted by the store closures will receive separation benefits, which includes assistance identifying other employment opportunities and outplacement services, such as resume writing and interview preparation.”
The chain has largely scrapped sales of appliances and furniture to focus on clothing and home goods, which it sees as having more potential and more aligned with its core customers.
J.C. Penney has also been more disciplined in clearing its shelves and floors of merchandise that isn’t selling to focus on items that have more appeal.
“We have incredible products in our stores,” J.C. Penney’s recently appointed CEO, Jill Soltau, who is pursuing a turnaround, said in an earnings call with investors. “It’s also critically important to the customer experience.”
Sales at J.C. Penney stores open at least a year fell 4 percent in the fiscal fourth quarter, which includes the critical holiday shopping season.
Department stores are struggling to adjust to digital competition and more innovative physical retailers.
J.C. Penney’s rival, Sears, barely survived Chapter 11 bankruptcy when it was sold this month to its longtime chairman and largest shareholder. But Sears has closed hundreds of locations in recent years as its sales cratered.
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Soltau is under pressure to successfully execute the company’s pivot to focus on clothes and beauty products.
Investors liked what they saw Thursday. The company’s stock jumped 28.2 percent to $1.59 at 12:28 p.m.
“The future trajectory of the company will be down to her and success relies upon decisive action with a firm focus on the shopper,” Neil Saunders, managing director of GlobalData Retail, wrote Thursday. “Our main concern is that JCP has very little time to course correct. The business needs to move at pace and without any missteps – a tall order in today’s complex and fast-moving retail environment.”
Contributing: Charisse Jones
Follow USA TODAY reporter Nathan Bomey on Twitter @NathanBomey and Charisse Jones @charissejones
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