JCPenney stores at KOP and Philadelphia Mills to close

Shoppers enter the J.C. Penney at the Philadelphia Mills Mall. It along with the store in the King of Prussia Mall are slated to close in June.

The woes of department stores continued Friday as J.C. Penney Co. announced a new round of closings that includes stores at the King of Prussia Mall and Philadelphia Mills Mall in the Northeast.

The company said it would shutter 138 stores nationally.

Last month, it announced that the Penneys store at Willow Grove Park would close as part of the company’s downsizing strategy to better compete in an increasingly online retail world.

Digital shopping has dismantled the profit margins of department stores, especially at malls, and taken the stores' once-formidable place among American households.

A statement from Penneys said the closures were "to align the company's physical-store footprint and omnichannel network."

"It's essential to adjust our store portfolio and invest in those locations that offer the best expression of the J.C. Penney brand and can function as a seamless extension of the omnichannel experience," spokesman Joey Thomas said. 

Simon Property Group, which owns King of Prussia and Philadelphia Mills Malls, declined to comment and deferred all questions to Penneys. Willow Grove Park Mall is owned by Pennsylvania Real Estate Investment Trust (PREIT).

The closures will affect about 5,000 positions, with most of the layoffs to occur in June. Most stores will begin the liquidation process on April 17, according to the company.

Also feeling the squeeze, Macy’s Inc. targeted 68 stores nationally to close this year on top of the 39 that closed last year. Those stores are whittling inventory with closeout sales of up to 80 percent.

Four Philadelphia-area Macy’s stores are closing by March 31. The first is Saturday at Neshaminy Mall in Bensalem. The three other stores closing are at Voorhees Town Center, Plymouth Meeting Mall, and Moorestown Mall.

The surging popularity of off-price retailers, such as T.J. Maxx, and value-priced outlet divisions of upscale brands, such as Nordstrom Rack, have also cut into the department stores' market share in the last decade, and retail analysts say all that department stores can hope for now is to stem the bleeding.

"Department stores have felt the sting of the shift to off-price retail and e-commerce competitors, which is reflected in declining mall traffic," wrote Moody's vice president Christina Boni in an October 2016 report. "Increased markdowns to clear merchandise experienced by major players dampens consumers' willingness to pay full price and underscores the sector's biggest Achilles' heel: Its slow supply chain."

Shoppers such as Melissa Gerrish of the Northeast were disheartened to hear of yet another store closing.

"It's a shame," Gerrish, an elementary school teacher, said as she left the Penneys at Philadelphia Mills on Friday. "It's been one after the other. It's endless."

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