Dive Brief:
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In coming months, J.C. Penney will shutter four stores across as many states, the department store said by email.
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Closing some time before Sept. 22 will be the anchors at the Shoppes at Bel Air in Mobile, Alabama; Sikes Senter in Wichita Falls, Texas; and Elm Plaza in Waterville, Maine. The J.C. Penney at the Westfield Annapolis Mall in Annapolis, Maryland, will close in 2025.
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The department store recently closed a location at the Wayne Towne Center in Wayne, New Jersey, but opened a new one at the Brookfield-owned Willowbrook Mall across the street. For the four newly planned closures, the company said it has “been unable to find suitable locations in the market” for any new stores.
Dive Insight:
Like Macy’s, J.C. Penney is in the midst of a turnaround and an effort to upgrade stores. Unlike Macy’s, Penney is taking it slow.
Last month, Simon Property Group CEO David Simon said that J.C. Penney’s isn’t likely to close many stores and in fact could benefit from opening new ones. J.C. Penney runs 663 stores, which mostly anchor malls. The retailer hasn’t experimented with off-mall locations the way other retailers have.
By contrast, Macy’s earlier this year said it would shutter 150 stores in the next three years and focus on revamping 50. Those locations will serve as a “leading indicator” for the performance of the 350 locations that will end up as the department store’s fleet. The retailer has also stepped up its number of smaller stores away from malls.
When Brookfield Properties and Simon Property Group agreed to buy J.C. Penney out of bankruptcy in 2020, many observers said the mall REITs likely hoped to keep those spaces occupied. An empty anchor not only deprives a mall of much-needed foot traffic but also often trips clauses in other store leases that allow for changes like rent breaks or tenant departures.
Neither Brookfield nor Simon owns any of the malls that will be losing a J.C. Penney anchor this year and next under the plans announced Wednesday.
“Regretfully, we are unable to continue our current lease terms for these store locations and have been unable to find suitable locations in the market,” the company said. “We are grateful to our dedicated associates and the loyal customers who have shopped at these locations throughout the years. We continue to work to make every dollar count for America's diverse, working families and welcome them to shop at our other JCPenney stores in the area and at JCPenney.com.”
In its most recently reported quarter, J.C. Penney’s net sales dropped 5.9% year over year to $2.3 billion, as net income in the quarter fell 8.9% to $41 million. In 2023 net sales, not including credit cards, fell 8.9% to $6.9 billion, as net income plunged 86.4% from last year’s $221 million. Consolidated EBITDA dropped 39.3% to $316 million.
