J.C. Penney Is Shuttering 33 Stores, Hoping For a Turnaround

After a year marked by sinking stock prices, the company will be laying off 2,000 employees.
Avatar:
Eliza Brooke
Author:
Publish date:
Social count:
518
After a year marked by sinking stock prices, the company will be laying off 2,000 employees.
Tim Boyle/Getty Images

Tim Boyle/Getty Images

After a year marked by sinking stock prices, J.C. Penney will be closing 33 of its stores nationwide and laying off 2,000 employees in the process. According to WWD, trimming underperforming stores is expected to result in $65 million in annual savings for the retailer that could help it turn its slump around.

The company's comments on its holiday sales last week were vague -- Penney was "pleased with its performance for the holiday period, showing continued progress in its turnaround efforts" -- and shares dropped accordingly.

Penney isn't the only department store looking to shed some excess weight in the new year: The same day that the company released its holiday report, Macy's announced that it would be laying off 2,500 employees, cutting stores and reorganizing to save an estimated $100 million per year. That news boosted Macy's shares by 6 percent, so we'll be watching to see how Penney fares throughout today. Sears, too, has been slashing storefronts from its roster.

As e-commerce steals sales away from brick and mortar stores, cutting weak offline branches to focus on those that still see good foot traffic may simply be the course of things for retail chains. While J.C. Penney's comparable store sales dropped 4.8 percent in the third quarter, online sales were up 24.5 percent as compared to Q3 of 2012, representing $266 million of the $2.78 billion net sales for the period ending Nov. 2.

According to WWD, Penney's road map for the weeks ahead includes remerchandising its intimates floor for Valentine's Day and reintroducing bra-fit specialists, new brand positioning for the Academy Awards and introducing exclusive partnerships in the men's golfwear and women's career wear categories.

But, as with seemingly everything these days, Penney's will be opening at least one new location this year: in Brooklyn's Gateway II shopping center.