NEW YORK (AP) – J.C. Penney says it will be closing anywhere from 130 to 140 stores as well as two distribution centers over the next several months as it aims to improve profitability in the era of online shopping.
The closures, announced Friday, represent about 13 percent to 14 percent of the company’s current store count, and less than 5 percent of total annual sales.
The retailer announced it also plans to implement an early retirement program.
“We understand that closing stores will impact the lives of many hard working associates, which is why we have decided to initiate a voluntary early retirement program for approximately 6,000 eligible associates. By coordinating the timing of these two events, we can expect to see a net increase in hiring as the number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures,” said Marvin R. Ellison, chairman and chief executive officer of JCPenney, in a news release.
Eligibility for the Voluntary Early Retirement Program (VERP) will generally include home office, stores and supply chain personnel who met certain criteria related to age and years of service as of Jan. 31. Approximately 6,000 associates are eligible for the program.
The news came as J.C. Penney posted a profit in the fourth-quarter compared to a loss a year ago. The company posted quarterly sales of $3.96 billion, down 0.9 percent from $3.99 billion a year ago. Revenue at stores opened at least a year was down 0.7 percent.
J.C. Penney is joining other department stores like Macy’s who are shrinking its footprint amid challenges in the industry.
J.C. Penney plans to release a full list of planned closures in mid-March pending notification of all affected personnel. Nearly all impacted stores are expected to close in the second quarter of 2017.