In what can be pegged as a massive blow to the traditional retail market, J.C. Penney Co. has announced that it will be shuttering up to 140 of its stores by June this year.
J.C. Penney has refrained from mass closures up until now, but that’s changing with the company revealing that it will close anywhere between 130 and 140 stores out of its 1000 stores nationwide. The company said it was also offering a voluntary buyout program to 6,000 of its employees.
The company recently announced profits after seven years – first since 2010 – but executives said they were closing weaker stores so as to channel their attention and investment towards stores and markets that are performing well. The company is yet to decide which stores it will be closing, but reports indicate that the company will most likely close smaller stores in rural locations.
J.C. Penney joins a long list of retail chain stores that have been shutting their stores for not being able to keep up with online retailers. Macy’s Inc. has plans to close 100 locations and is exploring options for the rest of its real estate, while Sears Holdings Corp. is closing 108 Kmart and 42 Sears stores.
Penney Chief Executive Marvin Ellison said the closings will allow Penney to adjust its business to “effectively compete against the growing threat of online retailers.” He said the remaining store base gives Penney an advantage since the locations can be used to ship or pick up online orders, minimizing delivery costs. In 2016, about 77% of Penney’s online orders touched a physical store.