There’s more bad news in the retail sector, as JC Penney will close distribution centers and up to 140 retail stores before fall, while offering buyouts to 6,000 employees. Operations from a Penney distribution center in Florida are being consolidated with the Atlanta facility.
“Anchor department store closures just keep coming, as J.C. Penney Company Inc. (NYSE: JCP) announced plans this morning to close two distribution facilities and between 130 and 140 of its retail stores over the next few months,” according to CoSTAR.
The legendary retailer describes the move as necessary to optimize its so-far successful return to profitability. Penney, like other major department stores, is reducing its inventory of brick-and-mortar locations as it adjusts to its balance of online and in-person business.
“This is just a market correction,’’ Farla Efros, president of HRC Retail Advisory, told USA Today. “There were too many stores, and too many retailers and too much noise in the market.’’
Penney CEO Marvin Ellison said online competition and smaller fashion discounters like TJ Maxx is forcing department stores to adjust their strategies.
According to Penney the average size of its stores is 100,000 square feet.