After briefly rising, shares of JCPenney, the department-store chain, fell as much as 10 percent in Friday trading after the company responded to disappointing 2016 profits by pledging to close 130 to 140 of its 1,000 stores and some distribution centers, and to put 6,000 of its 105,000 office, store and supply workers on early retirement.
Locally, Penney's will close its store at Willow Grove Mall, my colleague Jacob Adelman reports here. The chain said it was working on a list of stores to close and would post it in March. Penney's will target small, low-sales stores, noting in a statement to investors that it will shut up to 14% of it store locations accounting for just 5% of annual sales, and none of the chain's profits.
Department stores like Macy's and Penney's have been shutting their more-expensive and less-busy locations as shoppers buy more through smartphone mobile shopping apps that rely on Amazon.com and other warehouse-based mail-delivery services.
Penney's has stores in the King of Prussia, Philadelphia Mills, Willow Grove, Deptford, Montgomery and Oxford Valley malls in Pennsylvania, in Cherry Hill and Deptford, N.J., and at Prices Corner and Christiana, Del., among others in the region.
"The stores identified for closure either require significant capital to achieve the Company’s new brand standard or are minimally cash flow positive today relative to the Company’s overall consolidated average," Penney's said in its statement.
Penney's expects the shutdowns will cost an initial $225 million in broken leases, abandoned-property write-offs and "transition costs," and then save the company $200 million a year.