JCPenney will close 33 underperforming stores across the U.S. as part of a turnaround strategy that will see the retailer focus on those with higher growth potential.
The decision, which will cut 2,000 jobs but will save the retailer $65 million, caused JCP shares to decline slightly (1.1 percent) on Wednesday.
The news comes after a series of beleaguered years for the retailer that have seen a prolonged court battle with Macy’s over the rights to Martha Stewart-branded products and the departure of CEO Ron Johnson after his plans for a turn around failed to find traction with consumers.
The closure of the 33 stores, which span the country, will be completed by May. At the same time, JCP will continue to move forward with plans to open a new store in 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," says Myron E. Ullman, III, chief executive officer, 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."