J.C. Penney to close at least 130 stores; Ariz. impact unclear
Retailer has 22 outlets in state, including 9 in Valley
J.C. Penney Co. said it will close 130 to 140 stores nationally over the next few months and offer early retirement to roughly 6,000 employees, with a full list of affected stores to be released by mid-March and the stores slated to close in the second quarter.
Two distribution centers, in Florida and California, also will close or be sold, the company said Friday.
With more than 1,000 stores, J.C. Penney operates 22 in Arizona, including nine in metro Phoenix, according to the company’s website. It’s not clear which Arizona stores, if any, will be shuttered. In recent months, Sears and Macy’s both announced large national store closings, but no Arizona outlets were affected.
The Penney stores slated to close are underperformers, representing 13 to 14 percent of the company’s store count yet generating less than 5 percent of sales.
“We believe we must take aggressive action to better align our retail operations for sustainable growth,” said Marvin Ellison, chairman and CEO of the company, which is headquartered in Plano, Texas.
“We understand that closing stores will impact the lives of many hardworking associates, which is why we have decided to initiate a voluntary early retirement program for approximately 6,000 eligible associates,” he said in a statement. “By coordinating the timing of these two events, we can expect to see a net increase in hiring as the number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures.”
Ellison said closing stores will allow the company to compete more effectively amid “the growing threat of online retailers.” He described J.C. Penney’s physical stores as places for “personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services.”
He predicted that future winners in retail will be companies that can get customers to interact both in stores and through e-commerce, such as in allowing internet purchasers to pick up deliveries at a nearby outlet. Last year, 75 percent of Penney’s online orders “touched a physical store,” he said.
Employees impacted by the store closings will receive separation benefits, including assistance finding other employment. 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.