J.C. Penney will be closing 130-140 stores in the coming months, the company reported Friday. The announcement is part of the company's plan to "return to profitability". "By coordinating the timing of these two events, we can expect to see a net increase in hiring as 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", added Ellison.
Penney also announced Friday that nearly all of the affected stores will close in the second quarter.
The release posted online says the closures will save the company $200 million in annual costs, but the plan itself will cost $225 million. Sports Authority went out of business following a bankruptcy filing past year.
About 6,000 employees will be offered a voluntary early retirement program, Ellison said. Presumably, the pay rates of the new hires will be lower. J.C. Penney executives have not released the specific locations that will close, but plan to do so by mid-March.
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Penney's will close a distribution center in Lakeland, Fla., in June, and is in the process of selling its supply chain facility in Buena Park, California, in an effort to monetize a lucrative real estate asset, Ellison said.
The total store closures represent approximately 13 to 14 percent of the company's current store portfolio.
"Our stores are a destination for personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services", Holland said, emphasizing the importance of the company's brick-and-mortar presence.
"We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers".