JC Penney announces store closings

J.C. Penney announced on Friday that it will close approximately 140 of its stores in the next few months.
By Alex Bourque | Feb 25, 2017

J.C. Penney announced on Friday that it will close approximately 140 of its stores in the next few months.

According to the clothing retailer, the reason for the closures is that online sales is predicted to usurp in-store sales in the near future.

"People are becoming more comfortable with buying everything, even clothing, online," said J.C. Penney retail consultant Chris Boring. "Once they realize they can make a purchase online and it's not a hassle, they keep doing it. My prediction is that by 2030 we'll be buying most of our clothing online."

In the announcement, J.C. Penney, which operates over one thousand stores, said that closing the physical locations would better align the presence of the store with the views of the company on sales trends. In January, J.C. Penney posted a profit for the 2016 year, which is the first since 2010. According to the company, there was a 17.8 percent rise in online sales during the holiday season. That precipitated store closings in January. J.C. Penney anticipates releasing a list of planned closures during March and closing all affected stored before the third quarter of 2017.

"We believe closing stores will ... allow us to adjust our business to effectively compete against the growing threat of online retailers," said chairman and Chief Executive Officer, Marvin R. Ellison.

"Maintaining a large store base gives us a competitive advantage in the evolving retail landscape," continued Ellison. "We believe the future winners in retail will be the companies that can create a frictionless interaction between stores and e-commerce, while leveraging physical locations to minimize the growing operational costs of delivery."


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