Actions expected to generate annual savings of approximately $65 million, beginning in 2014
PLANO, TX - (Jan. 15, 2014) – After closing 15 outlet stores in 14 states last October (see story here), J. C. Penney Company, Inc. (NYSE:JCP) announced Wednesday that as part of its turnaround efforts, the Company will be closing 33 underperforming stores across the country and lay off 2,000 employees in order to focus its resources on the Company's highest potential growth opportunities.
These actions are expected to result in an annual cost savings of approximately $65 million, beginning in 2014. In connection with this initiative, the Company expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods.
Remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May. The closings will result in the elimination of approximately 2,000 positions. Eligible associates who do not remain with the Company will receive separation benefits packages. Meanwhile, the Company is continuing its plans to open a new store location later this year at the Gateway II development in Brooklyn, N.Y.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said Myron E. (Mike) Ullman, III, chief executive officer of JCPenney. "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."
The embattled company's stock price is near a 52-week low. Penney made its announcement after the close of regular trading Wednesday. Shares were down 1.1% in after-hours trading, to $6.93.
Here is the list of planned store closures
Selma, Ala. -- Selma Mall
Rancho Cucamonga, Calif. -- Arrow Plaza
Colorado Springs, CO -- Chapel Hills Mall
Meriden, Conn. -- Meriden Square
Leesburg, Fla. -- Lake Square Mall
Port Richey, Fla. -- Gulf View Square
Muscatine, Iowa -- Muscatine Mall
Bloomingdale, Ill. -- Stratford Square Mall
Forsyth, Ill. -- Hickory Point Mall
Marion, Ind. -- Five Points Mall
Warsaw, Ind. -- Marketplace Shopping Center
Salisbury, Md. -- The Centre at Salisbury
Marquette, Mich. -- Westwood Plaza
Worthington, Minn. -- Northland Mall
Gautier, Miss. -- Singing River Mall
Natchez, Miss. -- Natchez Mall
Butte, Mont. -- Butte Plaza Shopping Center
Cut Bank, Mont.
Kinston, N.C. -- Vernon Park Mall
Burlington, N.J. -- Burlington Center
Phillipsburg, N.J. -- Phillipsburg Mall
Wooster, Ohio -- Wayne Towne Plaza
Exton, Pa. -- Exton Square Mall
Hazleton, Pa. -- LaurelMall
Washington, Pa. -- Washington Mall
Chattanooga, TN -- Northgate Mall
Bristol, Va. -- Bristol Mall
Norfolk, Va. -- Military Circle Mall
Fond Du Lac, Wisc., Forest Mall
Janesville, Wisc. -- Janesville Mall
Rhinelander, Wisc. -- Lincoln Plaza Center
Rice Lake, Wisc. -- Cedar Mall
Wausau, Wisc. -- Wausau Mall
J.C. Penney has 116,000 staffers and operates more than 1,100 stores. All the job cuts are related to the store closings.