JCPenney Announces Plans to Shutter 140 Stores

HAYWARD, CA — JCPenney revealed plans Friday to shutter up to 140 of its stores nationwide over the next few months and its distribution centers in Lakeland, Florida, and Buena Park, California.

The move is hoped to help JCPenney better compete in the changing retail marketplace, CEO Marvin R. Ellison said in a statement.

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

A timetable for the closings and a complete list of affected stores has not been released, which means the status of East Bay stores in Concord, Hayward, Newark, Pleasanton and Richmond is unknown. The company said a full list of planned closings will be available in mid-March, “pending notification of all affected personnel.”

The store closings are estimated to represent about 14 percent of JCPenney’s current locations, adding up to less than 5 percent of the retail giant’s total annual sales.

The stores that will be targeted for closing are those that are underperforming or those that require a large capital investment to align them with JCPenney’s “new brand standard,” the statement noted.

Ellison said JCPenney plans to offer voluntary early retirement to about 6,000 affected employees. Affected employees not eligible for early retirement will receive separation benefits, including assistance in helping them find new jobs, the statement said.

While up to 140 stores will close, JCPenney said it intends to maintain a large number of brick-and-mortar locations under the restructuring.

“It is essential to retain those locations that present the best expression of the JCPenney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns,” Ellison said.

The company estimates the store closings will save it about $200 million this year. JCPenney reported annual sales of $12.63 billion in 2016, up from $12.26 billion in 2015, according to Market Watch.

Earlier this year, Macy’s also announced the closing of 68 of its store locations as the trend for department stores to move online continues. Kmart and Sears have also announced store closings over the past year.

To read JCPenney’s full statement, visit the retailer online.

Photo by Mike Mozart via Flickr used under Creative Commons