J.C. Penney to shut 130-plus stores
NEW YORK — J.C. Penney is joining its department store rivals in pruning its store numbers in an era of online shopping.
Penney said Friday it will close 130 to 140 stores over the next several months as it tries to improve profitability, but will not identify which stores until mid-March. The closures are expected to start within the next several months.
Penney has 10 stores in New Mexico, including two in Albuquerque, at Cottonwood and Coronado malls.
The company also will close two distribution centers, but will create a voluntary early retirement program for about 6,000 eligible employees.
The news came as Penney posted a profit for the fourth quarter, compared to a loss a year ago. But total sales were down slightly, and a key revenue metric declined a bit as well. The company issued a conservative annual forecast, sending shares down 9 percent on Friday.
CEO Marvin Ellison acknowledged Penney wasn’t strategic with promotions, which hurt profit margins, and said its level of couponing was “unhealthy.” It plans to use a more data-driven approach to pricing after testing the strategy in some categories last year.
Like other department stores, J.C. Penney is trying to adjust to changing shopping patterns. But it is also still recovering from a catastrophic reinvention plan under a former CEO that sent sales and profits freefalling starting in 2012. Since then, it has focused efforts on its home area, started selling major appliances again and expanded its number of in-store Sephora beauty shops.
While its annual sales still shrunk, it was able to pull in a $1 million profit for the full fiscal year, the first time it earned an annual profit since 2010. The stores it is closing represent about 13 percent to 14 percent of its current store count of about 1,000.