JCPenney to Close More Stores Amid Sales Slump

It’s going to take a while beleaguered retail chain J.C. Penney Co. Inc. to turn its business around.

The firm today announced another round of store closures in conjunction with another quarter of slumping sales and earnings.

The Plano, Texas-based department store said it would close 18 full-line stores this year — including the three locations announced in January — as well as nine ancillary home and furniture outposts to help align “its brick-and-mortar presence with its omnichannel network” and to reallocate capital resources to “locations and initiatives that offer the greatest long-term value potential.”

The company said the affected stores were either underperforming or required substantial capital to operate.

JCPenney — which struggled for much of the past year as it grappled with waning relevance, C-suite turnover and a share price that has tumbled below $2 — also reported today fourth-quarter sales of $3.67 billion, a year-over-year decline of 10 percent and below the $3.79 billion analysts had predicted. Comparable sales for the period — which included the all-important retail holiday season — fell 4 percent on a shifted calendar basis and 6 percent on an unshifted basis.

Adjusted profits also took a tumble, sinking more than 60 percent over the comparable period to $57 million, or 18 cents per share, but were better than the 11 cents per share market watchers projected.

CEO Jill Soltau, who joined the firm in October and replaced former chief Marvin Ellison, said she is “convinced that JCPenney is a revered brand that has the capacity to deliver improved results” despite its past financial performance.

“We have already taken meaningful steps to drive improvement in key businesses such as women’s apparel, active apparel, special-sized apparel and fine jewelry,” she added.

For the full year, the company’s sales fell 7 percent to $11.7 billion. It also reported an adjusted net loss of $296 million, or 94 cents per share, compared with adjusted net income of $31 million, or 10 cents per share, last year.

“As we forge a path to sustainable profitable growth, our decisions included eliminating non-core and low-gross-margin product categories, significantly reducing unproductive inventory and continuing the revitalization of our women’s apparel business,” Soltau said. “While we are pleased with these actions, we know we need to move faster to re-establish the fundamentals of retail, build capabilities focused on satisfying our customers’ wants and needs, and ensure that our digital and store operations operate seamlessly to provide an experience that wins with customers. We have much work to do to position JCPenney for success and create long-term value for our shareholders; however, our unwavering focus and discipline is already enabling meaningful progress.”

Overall, investors appeared to cheer the results and Soltau’s strategy.

As of 10:15 am ET, JCPenney shares had soared 21 percent to $1.50.

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