JC Penney To Close Stores In Recovery Efforts

Retailers have had a tough go the past few years, particularly the older brick-and-mortar stores that have only really known one way to do business and have had trouble transitioning into today’s technology-driven market.  And in no way is this clearer than the shuttering of so many retailers who have not been able to keep up.  

You may recall, for example, that Sears has had a constant presence in headlines the last couple years with threats of bankruptcy. It appears that JCPenney’s—another American mall anchor store stalwart—has been struggling, too. Fortunately, JCPenney’s has performed better than expected this holiday season and may be able to avoid the same fate as some of their competitors.  

Sure, sales at JCPenney’s stores open at least a year still suffered losses, but the 4 percent drop they posted this holiday was much better than what investors had originally expected.  The company says that a boost in toys and in women’s clothing helped lead to a $75 million profit margin for the fourth quarter. 

And on this news, shares of JCPenney shot up 27 percent, on Thursday, rebounding quite a bit from falling below $1 earlier this year; a feat the company had never before achieved in the 90 years they have been in business. At present, the stock is trading between $1.50 and $1.60.

With that, JCPenney’s CEO Jill Soltau told a group of analysts, on Thursday, “This is not business as usual. We are taking deliberate actions to improve.”

These deliberate actions are, actually, nothing new. For example, when Soltau took over just last year she pledged, nearly immediately, to take “quick action” to shift the financial statement out of the red. And she got started right away by installing a new management team, appointing a new chief merchant from Target just this week. 

Of course, this is just the beginning:  the company still posted a $255 million loss on the year. But the company plans to close 18 under-performing department stores by the end of this year.  This is in addition to nine home and furniture stores; which will leave about 800 stores open across the country.

The goal is a noble one, though.  Penney’s still as more than $2 billion in loan payments due in 2023.  Still, Soltau remains optimistic. She assures, “In spite of our past financial performance, we have already taken meaningful steps to drive improvement in key businesses such as women’s apparel, active apparel, special sized apparel, and fine jewelry.”