The news of JCPenney closing down 33 stores nationwide, costing roughly 2,000 people their jobs, is adding to retailer woes in an economy still struggling. The closings are part of a new turnaround plan that the company hopes will arrest a trend of losses.
The once-profitable giant department-store chain said late Wednesday the decision is projected to save an annual $65 million beginning in 2014. It wasn’t a cut-and-run decision, as JCPenney says they will be hit with $26 million in the fourth quarter and $17 million in future quarters to cover the cost of severance and other closing expenses.
“As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly,” Penney CEO Mike Ullman said in a statement.
JCPenney stock shares fell more than 2.5 percent to $6.83 in after-hours trade following the announcement. They have fallen more than 62 percent over the last 12 months.
The move comes nearly two months after the company reported a much deeper third-quarter loss on weaker-than-expected sales, and a December jobs report that showed the U.S. economy disappointingly created just 74,000 jobs.
The unemployment rate fell only because nearly 92 million Americans have given up on the American Dream, dropping out of the work force entirely.
J.C. Penney says their inventory left over in affected stores will be sold over the next few months, with the closings anticipated by early May.
It does, however, have plans to actually open a new store later this year in Brooklyn, N.Y.
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When will the announcement be made where the stores are closing & also will there be any closings in the Raleigh, NC area?