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JC Penney prepares to shut down 33 underperforming stores

By FashionUnited

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US department store company JC Penney Co. Inc is set to close 33 stores

across 20 states, which have not been performing well, in an effort to focus on more promising growth possibilities.

The company announced that the closure of the stores is part of its turnaround efforts and is set to result in an annual cost savings of roughly 65 million dollars. However the store shutdowns will also result in the loss of 2,000 jobs, as JC Penney's plans to sell the remaining inventories and complete the store closures by early May. Eligible associates who are unable to stay with the company will be given separation benefits packages.

“As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly,” commented Myron E. Ullman, CEO of JC Penney. “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 JC Penney for future success.”

JC Penney stated that due to the store closures, the company predicts that it will incur estimated pre-tax charges of 26 million dollars in the fourth quarter of fiscal 2013, and nearly 17 million dollars in future periods. The company will continue plans for the opening of its new store at the Gateway II development in Brooklyn, New York.

The department store company's announcement comes swiftly after Macy's Inc revealed its new strategic plan to cut costs, which includes the closure of five stores and the loss of 2,500 jobs.

JCPenney
Macy's