33 JCPenney stores to close

[Brian Lutz]

http://www.usatoday.com/story/money/bus ... rit=110940

JCPenney has announced that 33 stores will be closing by May 2014. The first of many, I imagine. A full list of the closing stores is at the article.

[KingU8ol0Soopers]

They have a store closing at The Chapel Hills mall, which is the mall closest to me. The store opened in 1995, replacing a Service Merchandise. Factors that attributed to the store's closure was how it was tiny in comparison to the other two Penny's in Colorado Springs: this one was about 60,000 sq ft whereas the other two are about 100,000 sq ft and 200,000 sq ft. The 200,000 sq ft store is relatively new and located close to a large chunk of the mall's population as well.

This comes at an interesting time for the mall - they recently added a brand new H&M and a brand new 13 screen movie theater, but the Border's that closed when the chain went bankrupt a couple of years ago is still vacant, so it should be fairly
Interesting to see how long it takes for the space to be filled, as well as who ends up filling it. I'm thinking that a Forever 21 could possibly work well in this space.

http://m.gazette.com/j.c.-penney-to-clo ... le/1512701

[Alpha8472]

I am surprised that the number is not higher. I would think that there are tons of JCPenney stores that do very little business. There is a JCPenney Furniture Store not even a quarter of a mile down the street from a JCPenney Department store near me. The furniture store is empty all the time. I have never seen more than a few customers in there at the same time. The department store is not doing well either and it is inside of a mall as a major anchor. I have wandered around and taken photos without even seeing an employee for the longest of times.

Something tells me that these closures are nothing serious. If it were serious, there would be widespread closures. I assume that the vast majority of JCPenney stores will still operate even if they are making little profit. Breaking leases costs money and JCPenney has some leases that go back decades. They probably are paying below market rate rent on those old stores which makes even closing unlikely.

[arizonaguy]

Something tells me that these closures are nothing serious. If it were serious, there would be widespread closures. I assume that the vast majority of JCPenney stores will still operate even if they are making little profit. Breaking leases costs money and JCPenney has some leases that go back decades. They probably are paying below market rate rent on those old stores which makes even closing unlikely.

I agree that I don't think that these closings are anything serious. I do think all traditional retailers (save for Target and Walmart) will be closing stores over the next few years. JCPenney needs to shed some of the under performers in the normal course of business. Heck, Macy's just announced 5 store closures recently.

[storewanderer]

They really have not closed many stores in recent years. This is probably nothing. When you look at the store base, the stores I am most curious about are the ones in smaller markets that did not get any renovation dollars under the prior management. And, I believe prior management made it known they were not sure what they would do with those smaller market stores. Those smaller market stores are the foundation of the chain, I would guess cost relatively little to operate, and despite that they've been leaving many such markets over the past 20 years, I have to think the locations that remain must eek out a profit given the circumstances.

It is interesting this appears to be mostly mall stores, not smaller market stores.

I also agree many retail closures are to come. The dollar has been spread too thin.

[BillyGr]

When you look at the store base, the stores I am most curious about are the ones in smaller markets that did not get any renovation dollars under the prior management. And, I believe prior management made it known they were not sure what they would do with those smaller market stores. Those smaller market stores are the foundation of the chain, I would guess cost relatively little to operate, and despite that they've been leaving many such markets over the past 20 years, I have to think the locations that remain must eek out a profit given the circumstances.

It is interesting this appears to be mostly mall stores, not smaller market stores.

It would make sense that they are cheaper to run, if they are smaller requiring less stock and people, plus any of them that are older would likely have less cost (rent or such).

Also - it could be the area(s) they are in and the lack of other retail in those areas - one example that comes to mind here in the Northeast is the store in Bennington, VT.

They have only a Kmart (which isn't huge, it shares the plaza with JCP) and a Walmart (which may finally be expanding, but is in a former 5&10 store and is only about 1/2 the size of a regular (non super) Walmart) in town as competition.
Beyond those, you have to travel probably 1/2 hour to 1 hour in any direction to other major shopping areas (north to the outlets in Manchester or all the way to Rutland for anything resembling a mall, east to probably Brattleboro or over into NH, South to at least North Adams MA, or further for a mall, West to the greater Albany NY area).

[Brian Lutz]

Some of the small-town stores are surprisingly small. A few years ago I recall visiting a JCPenney store in Burley Idaho that couldn't have been more than 15,000 square feet or so. It isn't quite the middle of nowhere (Twin Falls isn't too far from there) but I can't imagine there being a whole lot of shopping options in that area.

[Super S]

The thing that is most interesting about JCPenney is that they have demonstrated an ability to locate stores where people are most likely to shop. When a mall was built in an area, they almost always departed the downtown area for a mall location. In recent years, they have opened a number of standalone stores. However, some downtown stores, which almost seem to be from another era, have survived in small towns where there are no larger shopping centers in close proximity. I once thought JCPenney would be most likely to fold up, but the chain has recognized that they made a lot of mistakes, and if they can get their act together, has a chance of survival. Sears, on the other hand, has continued making many mistakes in nearly every aspect of store operations and doesn't really seem to care, while conveniently closing stores left and right as they reach the end of their leases.