In addition to reporting earnings, JC Penney announced plans to "optimize retail operations" in 2017 which include shuttering between 130 and 140 store locations and closing two distribution centers. The stores it is closing represent about 13 percent to 14 percent of its current store count of about 1,000, but less than 5 percent of total annual sales.
"This year was not without its challenges, particularly in our women's apparel business, but I am proud this team delivered on our goal to return our company to profitability in 2016", JCPenney Co.'s chairman and chief executive officer, Marvin R. Ellison, said in a released statement.
Penney's comparable store sales fell 0.7 percent in the fourth quarter ended January 28, steeper than the 0.5 percent drop analysts polled by research firm Consensus Metrix had expected. Enlow also said that CBL Properties, which owns Jefferson Mall, has been in contact with other retailers to take over the Macy's space.
The 1-million-square-foot, 24-acre compound at 6031 Orangethorpe Ave., was assessed at roughly $35 million a year ago, making it a valuable real estate asset for the troubled retailer. It was J.C. Penney's first fiscal profit since 2010. And thanks to offerings like buy online, pick up in store, 77 percent of online shoppers also visited a physical store in 2016.
J.C. Penney, which operates about 1,000 stores, plans to release a full list of planned closures in mid-March, with almost all of the stores expected to close in the second quarter of 2017. As recent as 2013, JC Penney reported a net loss of almost $1.3 billion, or ($5.13) per share, and negative EBITDA of $641 million.
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Ellison also announced that in order to reduce the impact on workers, the company was instituting an early retirement program for roughly 6,000 employees.
Nearly all of the stores on the closings list will be shut down sometime between March and June, the company said. J.C. Penney expects it will not end up reducing its overall employee headcount, because, Ellison said, the "number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures".
JC Penney reported stronger than expected earnings for the fourth quarter on Friday. Revenue at stores opened at least a year - a key industry metric - was down 0.7 percent.
JC Penney Expects FY17 Comps At -1% to +1%.