JCPenney Announces More Store Closures

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JCPenney plans to close 18 full-line stores in the second quarter, including three locations previously announced in January, executives told analysts on an earnings call, recording an estimated pre-tax charge of about $15 million in the process.

“Our current reality is clear,” said CEO Jill Soltau. “JCPenney has been and continues to be in transition. While it doesn’t matter how or why we got here, we are taking deliberate actions to improve our operations so we can build the kind of momentum that drives change.”

Soltau said it’s a critical time in the company’s evolution and it has to balance the need to act with immediacy with taking time to get the strategy right.

The company will also close nine ancillary home and furniture stores, in an effort to align its physical assets with its omnichannel network and allocate capital to initiatives that offers long-term value. Those stores either require significant capital, are minimally cash flow positive relative to other locations or represent a real estate sales opportunity. Comparable sales for the closing stores were significantly below the average, with a higher expense rate.

JCPenney’s total net sales for the quarter were $3.67 billion, down 9.5% from $4.05 billion last year.  Total net sales for the year decreased 7.1%, from $12.55 billion to $11.66 billion. Comp sales were down 4% in the quarter and 3.1% for the year.