Forum and wire reports, Published January 15 2014
Fargo J.C. Penney store not targeted for closingNEW YORK – J.C. Penney Co. Inc. said Wednesday it will close 33 underperforming stores and cut 2,000 jobs as part of the struggling department store chain’s efforts to return to profitability.
According to information provided by the company, no North Dakota stores are on the list of stores to be closed.
Only one Minnesota location, a store in Worthington, was on the list.
J.C. Penney, which operates about 1,100 mid-market department stores in the United States, including one at the West Acres shopping center in Fargo, suffered a 25 percent drop in sales in fiscal year 2012 after a failed attempt to go upmarket.
It has been trying to win back customers with deep discounts and the return of popular in-house brands. Sales started ticking up in fall 2012 after nearly two years of monthly sales drops.
But a press release with scant details on its December sales raised concerns that the turnaround stalled during the key holiday season. The company is still clearing out unsold merchandise from last year's failed reinvention at large discounts, pressuring its gross margin.
Analysts expect Penney to report a 70-cent per share loss for the holiday quarter.
Penney Chief Executive Myron Ullman called the cost-cutting move an important step that “addresses a strategic priority to improve the profitability of our stores.”
The closings will generate cost savings of $65 million per year, beginning in 2014. Penney expects estimated pretax charges of about $26 million in the current quarter.
The stores closing include five in Wisconsin, where archrival Kohl’s is dominant, three in Pennsylvania and two in Florida.
The struggling department store chain had 116,000 employees as of February 2, 2013. That was about 40,000 fewer than a year earlier as the company tried to cope with lower sales.