J.C. Penney (JCP) plans
to close up to 140 stores and offer buyouts to 6,000 workers as the
department-store industry sags in competition with online sellers and nimble
niche retailers.
The company said Friday that it
would shutter 13% to 14% of its stores, representing about 5% of its annual
sales, and two distribution centers.
The retailer expects to save $200
million in annual costs in connection with the plan but will record an initial
pre-tax charge of $225 million to cover the closure costs.
In a related move, Penney said it
would offer a "voluntary early retirement program" to about 6,000
workers, including corporate, store and supply chain workers.
The cuts come amid mounting
challenges for once-stalwart department-store chains such as Macy's and Sears,
which are aggressively closing stores and shedding costs as shoppers flock to
alternatives.
"We believe closing stores
will also allow us to adjust our business to effectively compete against the
growing threat of online retailers," CEO Marvin Ellison said in a
statement.
"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."
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