J.C. Penny Plans To Close 130 To 140 Stores

The future of the J.C. Penny at the Oxford Valley Mall in Middletown is up in the air.

The company announced Friday morning that they plan to close nearly 15 percent of their department stores and two distribution facilities as part of cost cutting moves. The plans detail closing 130 to 140 brick-and-mortar stores throughout the country. Philly.com reported the list of store closings will be released in March.

“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,” said J.C.Penny’s CEO Marvin R. Ellison. The company added that early retirement paperwork must be completed by March 17.

The 130 to 140 stores on the chopping block are making J.C. Penny little to no money, according to a statement from the company.

“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers. Maintaining a large store base gives us a competitive advantage in the evolving retail landscape since our physical stores are a destination for personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services. It is essential to retain those locations that present the best expression of the J.C.Penney brand and function as a seamless extension of the omnichannel experience through online order fulfillment, same-day pick up, exchanges and returns,” Ellison said.

The closings of the 130 to 140 stores in the second quarter is expected to save the company $200 million in annual costs. However, they will force the company to shell out about $225 million in one-time closing costs.

The Oxford Valley Mall J.C.Penney is one of the largest in the area and employs dozens of people in full- and part-time positions. The store is also one of the mall’s three remaining anchors. The other anchor stores are Macy’s and Sears, both of which have been consolidating their footprint nationwide. The former Strawbridge’s at the mall was converted to a Boscov’s department store in 2006 and closed two years later due to a restructuring of the Berks County-based retailer. The former Boscov’s location has sat empty in the mall since that time.

The potential closing of an anchor store in the mall would not be good. Currently, fewer and fewer retailers are opening large shopping destinations in malls like the department stores of the past. Smaller niche and discount retailers are seeing success with brick-and-mortar stores in recent years but often open smaller storefronts in malls.  

J.C.Penny’s CEO said he hopes the consolidation will help the company “effectively compete against the growing threat of online retailers.”