More retailers announce store closures

Andrew Cummings
February 25, 2017

J.C. Penney announced Friday it would shutter as many as 140 stores over the next few months, amid sagging sales and fierce competition from online retailers.

The company will also close a distribution center in Lakeland, Florida and sell a supply chain facility in Buena Park, California to "monetize a lucrative real estate asset".

In light of the impact closures will have on JCPenney associates, the company is offering an early retirement program.

The closures represent roughly 14% of the company's current store portfolio, but less than 5% of its total annual sales.

Macy's recently closed 100 stores nationally and laid off almost 10,000 employees.

"We believe we must take aggressive action to better align our retail operations for sustainable growth", J.C. Penney's chairman and chief executive officer, Marvin Ellison, said in statement.

"We are pleased that in the face of a very challenging 2016 retail environment we delivered our first positive net income since 2010".

The company also announced on Friday that is initiating a voluntary early retirement program for approximately 6,000 eligible employees.

J.C. Penney is not among Arizona's largest employers, according to the 2016 Republic 100 report on largest non-governmental employers, for which the cutoff was around 1,450 in-state workers.

The company noted that its Home, Sephora, Salon and Fine Jewelry were its top performing merchandise segments during the fourth quarter.

Revenue totaled $3.96 billion in the period, down 0.9 percent from a year ago. Comparable sales in these locations were "significantly below" the remaining store base and operate at a "much higher" expense rate.

The company said the closings are part of a strategic move to more effectively compete against the growing threat of online retailers. Adjusted diluted EPS were 8 cents per share compared with diluted losses per share of $1.03 a year ago.

Looking ahead, JCP forecast full-year EPS of $0.40-0.65 which straddles Wall Street's $0.58 estimate.

For this year, J C Penney expects adjusted earnings of 40 cents to 65 cents per share, compared to the consensus of 50 cents per share.

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