J.C. Penney To Close About 50 Stores

PLANO, Texas (AP) â€” J.C. Penney Co. Inc. plans to close about 50 department stores as new management tries to repair the troubled retailer, officials said Tuesday. <br><br>The company also is shuttering

Tuesday, January 23rd 2001, 12:00 am

By: News On 6

PLANO, Texas (AP) â€” J.C. Penney Co. Inc. plans to close about 50 department stores as new management tries to repair the troubled retailer, officials said Tuesday.

The company also is shuttering an undisclosed number of Eckerd drugstores, a spokesman said. The Plano-based retailer will announce the closings and release a list of affected stores later this week.

Penney has seen its market share slip for several years as it was outflanked by discounters and trendier retailers. Analysts say the company was slow to update its stores and suffered from poor marketing and stale merchandise.

The company began telling employees about the closings late last week, and workers at some additional stores are still being notified, officials said.

Spokesman Tim Lyons said the stores targeted for closing were identified during an ongoing review of sales performance. He said disappointing holiday season results â€” same-store sales fell 1.6 percent from December 1999 â€” were not a factor in the closings.

``These were underperforming stores,'' Lyons said. ``It's tough for the stores that are being closed, but it was something we felt we had to do to begin to turn the business around.''

The timing of the store closings will vary because of lease considerations, but many will shut their doors this spring, he said.

The company has not disclosed how many employees will lose their jobs. Lyons said some employees will be offered jobs at nearby Penney stores but most will be offered severance benefits.

Penney has about 1,100 Penney stores, 2,600 Eckerds and 290,000 employees. It had 1999 sales of $32.5 billion.

Officials declined to say how much the company expects to save from the closings or whether it would take a charge against earnings to cover shutdown expenses.

This is the second major round of store closings for Penney in as many years.

Last year, the company announced it would close 45 department stores and 279 Eckerds, which resulted in about 1,875 layoffs.

Allen Questrom, a veteran retail executive who became Penney's chairman and chief executive in September, said last month that as many as 50 additional department stores might be closed this year.

In his first public comments since taking over, Questrom said the company would go through a two-year transition improve sales and profits.

Penney posted a $23 million operating loss in the third quarter. The company hasn't yet reported fourth-quarter figures, but officials have warned of a difficult holiday season due to disappointing sales and heavy price markdowns.

Penney stock has slid more than 80 percent since mid-1998. In midday trading Tuesday, Penney shares were up 6 cents at $12.31 on the New York Stock Exchange.

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On the Net:

Company site: http://www.jcpenney.com