Floundering JC Penney continues losing streak by closing dozens of stores
JC Penney just can’t seem to do anything right these days. After an unfortunate incident with a teapot resembling Hitler and an even more unfortunate mention on 24/7 Wall St.’s list of the “10 most hated companies in America,” the department store chain announced earlier this month that it would be closing 33 stores across the country due to under performance.
Although the move is expected to save the company around $65 million annually, JC Penney will still incur pre-tax charges of around $26 million in the fiscal fourth quarter for 2013 as well as $17 million in the future. The closing stores account for less than 3 percent of the chain’s more than 1,100 stores in the United States, but the move means around 2,000 positions will be lost.
The process has already begun, and it is expected to take through early May 2014 to sell remaining inventory and move out. No Texas locations are affected by the closings, which hit Wisconsin the hardest, with five shuttered stores.
The company was trading as high as $42 per share in February 2012, but it has seen a steep and steady decline to today, where it moves for under $10 since a nosedive last September. At its highest point, JC Penney stock was trading at more than $80 in 2007.
In its article, in which JC Penney ranked the 10th most hated company, 24/7 Wall St. commented that the retailer has “probably made more operational and strategic mistakes than any other large publicly traded company in America.”
In a statement, JC Penney CEO Mike Ullman said the company was adjusting its national footprint to ensure long-term growth.
“While it's always difficult to make a business decision that impacts our valued customers and associates,” he said, “this important step addresses a strategic priority to improve the profitability of our stores and position JC Penney for future success.”