J.C. Penney’s decision to close 18% of its stores could help the bankrupt retailer regain its footing, but first liquidation sales will need to take place amid the most challenging of circumstances.
Just three weeks after filing for bankruptcy on May 15, J.C. Penney said it would close 154 of its 846 stores as part of a store optimization strategy. As the company remains focused on its “Plan for Renewal” and driving sustainable, profitable growth, it plans to focus resources on its strongest stores e-commerce site jcp.com, according to the company. Store closing sales are expected to take 10 to weeks to complete.
The liquidation sales come at a challenging time for J.C. Penney since other retailers forced to close stores due to COVID-19 are also re-opening and looking to clear spring and summer merchandise ahead of the fall season.
“While closing stores is always an extremely difficult decision, our store optimization strategy is vital to ensuring we emerge from both Chapter 11 and the COVID-19 pandemic as a stronger retailer with greater financial flexibility to allow us to continue serving our loyal customers for decades to come,” said Jill Soltau, CEO of J.C. Penney.
Judging from an analysis of the location of planned closures, it is apparent at this time that J.C. Penney believes it has a future as a mid-tier department store chain with a national footprint. For example, the company is reducing its physical presence by closing stores in 38 states with the per state closure figures proportional to state populations, in most cases. For example, nine stores are slated to close in heavily populated states such as Florida and Ohio, eight in California and seven each in Texas and New York. However, there are a few exceptions as the retailer also plans to close stores in less populated states such as Indiana(9), Kentucky(6), Oklahoma(6), South Carolina(6) and Tennessee(6).