J.C. Penney Announces The Closing of 33 Stores Nationwide, Cuts 2,000 JobsBy: Meaghan Ellis - January 16, 2014
On Wednesday, Jan. 15 the J.C. Penney Company, Inc. announced that it would be closing a total of 33 stores across the United States.
In a brief press release earlier today, the ailing retail chain stated that the executive order was made as apart of the company’s ‘turnaround effort’ to focus its attention on opportunities with the highest growth potential. The 33 stores that have been selected for closure are categorized as underperforming locations.
The store closures are projected to assist the retailer with retaining substantial profitability, with an annual cost savings of approximately $65 million. The company also projects to incur approximately $26 million in pre-tax charges for the fourth quarter of the 2013 fiscal year, and $17 million for future quarters thereafter.
It was also stated that the store closures will eliminate approximately 2,000 jobs. However, eligible associates who ultimately end up leaving the company will receive a separation benefits package.
J.C. Penney’s chief executive officer Myron Ullman III also issued a statement of address in regards to the announcement. “As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” said Ullman.
“While it’s always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success.”
According to CNN Money, last year was financially daunting for the mid-range department store. The company has reportedly suffered a staggering stock plunge of approximately 60% over the past 12 months, with a deficit amounting to hundreds of millions of dollars per quarter.
The company’s press release also included an official list of the stores that will be closing.
J.C. Penney’s announcement comes just one week after Macy’s announced that it would be closing five stores, and laying off 2,500 workers.
Image via Facebook | JCPenney