JCPenney announces closures of 130-140 stores

[wnetmacman]

Doing a little Google Maps digging on some of the others on the list:

• Benton and Blytheville, AR, both reside in former Walmart stores only taking a portion of the building.
  Seguin, TX occupies a shopping center that also houses a brand new HEB that replaced an older store there. Looks like they have demolished all but the JCP and a former Hastings; those may become history soon.
  Downtown El Paso looks larger than it actually is, and parking is minimal.
  All of the Mississippi stores are small markets.
  Bessmer, AL is an almost brand new store, but in a bad part of town. Jasper, AL is in a mall that also recently lost Kmart. Gadsden, Al was a recent upgrade, and a larger store, but a very rural market.

Essentially, JCP appears to be closing all the stores that can't be upgraded with Sephora, Appliances and Furniture.

[Super S]

Does anyone think Kemmerer only missed the knife because it's the chain's original store?

I think Kemmerer exists for the same reason Walmart keeps the storefront on the Bentonville square Walton's. It can't do much in sales; it's just too small.

Keep in mind that while these 138 stores account for almost 15% of the store base, they only accounted for less than 5% of total sales. Lots of coattail riders.

Kemmerer is also a national historic landmark district:

https://en.wikipedia.org/wiki/J._C._Pen ... c_District

It would at the very least be bad PR to close that location.

[storewanderer]

Some of these stores are true losses. You have to ask yourself, if these stores were performing so poorly, how did they make it this far? My guess is many of these made money, but it was not enough money for the current management's satisfaction. So the result is closing storefronts that are likely 50, 60, 70 years old and have served small communities for a long, long time. It it surprising they have any downtown stores left but they have quite a few left.

The closing store in Sheridan, WY... the one in The Dalles, OR... really all of the closures in Oregon... take a look at those old stores... wow... very historic. Some of the other closures like most in Kansas look to be in pretty dismal looking strip malls but again these are small markets and I am guessing the stores served a purpose and were profitable.

Curiously the store in Caliexico, CA is being kept open and it is a (larger, and somewhat more upgraded) downtown store.

In the malls, they have other competition. Better competition. And up and coming competition will be going to the malls, too.

In these small markets, they have a rather captive audience and the likelihood of new/better competition opening up in the small markets is almost zero.

Definitely a poor move.

[kr.abs.swy]

Storewanderer, based on some past comments by management, I think that many of these stores were probably cash flow positive -- BUT -- based on the fact that they were 15% of the store base but only 5% of sales, we can assume that their contribution to JCP's overall profitability was probably minimal or slightly negative. The smaller, older JCP stores that were targeted in this bloodbath that I have been in (Burley, Idaho; Decorah, Iowa; and Kemmerer, Wyoming) were all in pretty desperate need of some capex if they were going to match the image of the mall-based stores. Think old orange carpets, dim lighting, old floor tiles, and tired exteriors. I suspect that the decision came down to the fact that management knew that they were not going to get a reasonable return on any investments that they made to update these stores, so it was better to close them in order to keep them from affecting perception of JCP's brand. I've been in the Kemmerer store and even it hasn't aged terribly well. I hate to see these stores go as much as you do, but if you are operating a capital constrained business like JCP is (thanks to the need to dig out from the overhang of all the money that Ron Johnson wasted), you have to do what you have to do. It is sad to see these historic stores close, but it was probably the right thing to do.

Some of these stores are true losses. You have to ask yourself, if these stores were performing so poorly, how did they make it this far? My guess is many of these made money, but it was not enough money for the current management's satisfaction. So the result is closing storefronts that are likely 50, 60, 70 years old and have served small communities for a long, long time. It it surprising they have any downtown stores left but they have quite a few left.

The closing store in Sheridan, WY... the one in The Dalles, OR... really all of the closures in Oregon... take a look at those old stores... wow... very historic. Some of the other closures like most in Kansas look to be in pretty dismal looking strip malls but again these are small markets and I am guessing the stores served a purpose and were profitable.

Curiously the store in Caliexico, CA is being kept open and it is a (larger, and somewhat more upgraded) downtown store.

In the malls, they have other competition. Better competition. And up and coming competition will be going to the malls, too.

In these small markets, they have a rather captive audience and the likelihood of new/better competition opening up in the small markets is almost zero.

Definitely a poor move.

[storewanderer]

Many of the mall based JCP Stores (none of which are closing) I have been in are also in desperate need of capex. Green or orange carpets and overly yellowing lighting seems to be very common for this chain. What is funny is some stores got the Ron Johnston "shops" and look modern and pretty good physically (aside from messy presentation) and within eyesight are other "areas" that got zero update and have the awful green carpet and yellowing lighting.

I am not really sure that image is all that important in these small town locations; these small town downtown stores are not tourist attractions, and I expect they are being shopped by locals who just want a store, not really concerned with image. Basic maintenance and upkeep are another matter but if anything it is easier to recarpet a little 12,000 square foot store than a 150,000 square foot store. I certainly understand closing downtown stores like El Paso, TX or McAllen, TX when they have a mall store nearby. And I understand abandoning small markets that are no longer profitable, which they have been doing already for the past 30 years.

I really think this is a case of management throwing an ax to make it look like they are doing something. Which they are. They will improve their metrics by doing this. Average sales per store will rise, it will make them look more productive.

Check out the side of the store in Thief River Falls, MN; still has an old PENNEYS sign. And a weird blue P logo I've never seen before.

Sidney, MT also has an interesting PENNEY'S sign at the corner. Also an interesting looking very old KFC across the road.

Wahpeton, ND also looks interesting as it appears they are occupying multiple storefronts there but no real signage...?

[Super S]

Many of the mall based JCP Stores (none of which are closing) I have been in are also in desperate need of capex. Green or orange carpets and overly yellowing lighting seems to be very common for this chain. What is funny is some stores got the Ron Johnston "shops" and look modern and pretty good physically (aside from messy presentation) and within eyesight are other "areas" that got zero update and have the awful green carpet and yellowing lighting.

I am not really sure that image is all that important in these small town locations; these small town downtown stores are not tourist attractions, and I expect they are being shopped by locals who just want a store, not really concerned with image. Basic maintenance and upkeep are another matter but if anything it is easier to recarpet a little 12,000 square foot store than a 150,000 square foot store. I certainly understand closing downtown stores like El Paso, TX or McAllen, TX when they have a mall store nearby. And I understand abandoning small markets that are no longer profitable, which they have been doing already for the past 30 years.

I really think this is a case of management throwing an ax to make it look like they are doing something. Which they are. They will improve their metrics by doing this. Average sales per store will rise, it will make them look more productive.

Check out the side of the store in Thief River Falls, MN; still has an old PENNEYS sign. And a weird blue P logo I've never seen before.

Sidney, MT also has an interesting PENNEY'S sign at the corner. Also an interesting looking very old KFC across the road.

Wahpeton, ND also looks interesting as it appears they are occupying multiple storefronts there but no real signage...?

The carpet and lighting issues might be a regional thing. In my area, they have kept stuff like this up to date with newer fluorescent fixtures and LED spotlights. Carpets also look reasonably up to date. Even the Kelso store I have talked about has had updates (but escaped anything to do with Ron Johnson). But I will admit that I have not been inside a small town JCPenney in years so can't comment on the condition of those.

I do remember some JCPenney stores through the late 1980s using recessed mercury vapor lighting which tends to dim with age. This did not work too well when they went away from hardlines and the majority (if not all) of those stores use different lighting now. Most mercury vapor fixtures have become energy hogs and are falling out of favor, and I would be surprised if any major chain is still using them.

As for that Thief River Falls store, I have seen that P logo (in the oval) in pictures on some of the older auto centers. I have never seen a picture of it with the logo on a regular JCPenney store though.

[kr.abs.swy]

If you go back to the historic Google street view for the Wahpeton store, you see that there was a façade that stretched across all the storefronts until sometime in or after October 2012. I found this article: http://www.wahpetondailynews.com/news/j ... f887a.html that says that a CDC acquired the building. Per the article, the store almost closed in 2006 also.

One more thought on these smaller stores. There should be a cash flow boost from closing them because they get cash from liquidating all of the inventory. I read something where management said they plan to use that extra cash flow to pay down debt. It probably won't amount to too much, but ... again ... when you are capital constrained, you do what you have to do. They are pushing around a lot of debt.

Many of the mall based JCP Stores (none of which are closing) I have been in are also in desperate need of capex. Green or orange carpets and overly yellowing lighting seems to be very common for this chain. What is funny is some stores got the Ron Johnston "shops" and look modern and pretty good physically (aside from messy presentation) and within eyesight are other "areas" that got zero update and have the awful green carpet and yellowing lighting.

I am not really sure that image is all that important in these small town locations; these small town downtown stores are not tourist attractions, and I expect they are being shopped by locals who just want a store, not really concerned with image. Basic maintenance and upkeep are another matter but if anything it is easier to recarpet a little 12,000 square foot store than a 150,000 square foot store. I certainly understand closing downtown stores like El Paso, TX or McAllen, TX when they have a mall store nearby. And I understand abandoning small markets that are no longer profitable, which they have been doing already for the past 30 years.

I really think this is a case of management throwing an ax to make it look like they are doing something. Which they are. They will improve their metrics by doing this. Average sales per store will rise, it will make them look more productive.

Check out the side of the store in Thief River Falls, MN; still has an old PENNEYS sign. And a weird blue P logo I've never seen before.

Sidney, MT also has an interesting PENNEY'S sign at the corner. Also an interesting looking very old KFC across the road.

Wahpeton, ND also looks interesting as it appears they are occupying multiple storefronts there but no real signage...?

[J-Man]

Is this the "P" logo you're referring to? It was used on new stores in the late '60s, for sure, as I remember it at the new store at Sunvalley Mall in Concord, CA, built around '68.

[SamSpade]

Check out the side of the store in Thief River Falls, MN; still has an old PENNEYS sign. And a weird blue P logo I've never seen before.

Here's the fascinating history of the "Penney's" name used from 1963-1971. I think this is why my mom calls the store Penney's instead of JCPenney.
http://brandingsource.blogspot.com/2013 ... -1963.html

[TW-Upstate NY]

In regards to the "funky P" logo, that was on a store at the Viewmont Mall in Scranton, Pa which was built around the same time as that store in the post above. That signage survived on the building until at least mid-1980 when we moved from the area. I also seem to recall a freestanding funky P on the outer sides of the second level. It was actually quite a sight to behold when it was lit up after dark. As far as I know, that store is still around today but presumably with much more current signage (or maybe not-who knows.)