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J.C. Penney to close 33 stores, cut 2,000 jobs

by ELIZABETH A. HARRIS New York Times News Service on January 16, 2014 10:35 AM

In yet another sign of its deep slump, J.C. Penney Co. said Wednesday it would close 33 stores across the country and shed about 2,000 jobs.

The company said in a statement that the closings and resulting job cuts would save about $65 million a year.

One of the oldest retailers in the nation, J.C. Penney has undergone considerable management and investment turmoil in the last few years.

It fired one chief executive, Ron Johnson, and then brought back his predecessor, Myron E. Ullman III. It tried a new retail strategy, which alienated core customers, and reverted to its old strategy.

Its stock has plummeted nearly 80 percent in the last two years.

In Wednesday’s announcement, Penney said it was closing “underperforming” stores. But some analysts and industry experts said that with 1,100 locations and such extensive difficulties, shedding 33 stores would not be enough to move the needle on the company’s performance.

“The hole is too deep,” said Burt P. Flickinger III, managing director at the Strategic Resource Group, a consumer industry consulting company that specializes in retailing. “This is a warning shot across the bow to landlords to try to provide accommodations or concessions, like on common area maintenance charges or lease reductions.”

In Pennsylvania, J.C. Penney will close its Exton, Hazleton and Washington stores.

The news comes on the heels of what appears to have been a disappointing shopping season for many major retailers.

Several have already lowered their profit forecasts and reported holiday-season sales that were either fairly static or represented slight growth over the previous year. Just last week, Sears Holdings, another retailer that has been struggling for years, released terrible holiday results, saying that sales at it Sears stores in the U.S. dropped 9.2 percent during the holiday shopping season compared with the same period the previous year.

Despite the closings, which the company said should be completed by early May, Penney said it still intended to open a new store in Brooklyn.

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