RETAIL stores nationwide are struggling, coping with the rise of online shopping, declining foot traffic at brick-and-mortar locations, and inflation-weary, cash-strapped consumers.
The latest retail giant to face store closures is JCPenney, as the once-booming department store chain, facing declining sales and struggling to entice new customers, has continued to shutter locations nationwide.
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Why are JCPenney stores closing?
In the 2000s, JCPenney began experiencing stagnant or declining sales.
Other major retailers, especially discount stores like Target and Walmart, continued to expand and entice customers.
Meanwhile, online shopping began growing at a rapid rate, leading to the decline of malls and brick-and-mortar retailers nationwide.
Covid-19 proved to be the "final nail," with "virtually all of its stores closed amid a nationwide lockdown," as reported by Britannica Money.
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Most of JCPenney's store closures began after the company filed for Chapter 11 bankruptcy protection in May 2020.
That same month, JCPenney "began a store optimization strategy to better position the Company for sustainable, profitable growth."
This ultimately led to 175 store locations closing nationwide, starting in 2020 and through 2021.
Even after being bought out of bankruptcy at the end of 2020, JCPenney continued to face declining foot traffic and sales, at retail stores and online.
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JCPenney's latest Q4 net sales dropped to 2.3 billion, a 5.9% year-over-year decline, while the chain's Q4 net income fell 8.9% to $41 million.
The Securities and Exchange Commission also reported that net sales for the full year, excluding credit cards, fell 8.9% to $6.9 billion.
“Customers continue to deal with economic uncertainty and are looking for value more than ever," a JC Penney spokesperson said by email, as reported by Retail Dive.
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"We remain optimistic about a second half recovery and are well-positioned to continue delivering value to our customers throughout the year as that happens."
“At the same time, we are carefully managing risk to ensure the stability of our business if the retail environment is challenged in the balance of 2024.”
How many JCPenney locations are there?
At its height in 1973, JCPenney operated more than 2,000 stores nationwide.
By the time the retailer filed for bankruptcy in 2020, the store count had fallen to 846 locations.
Today, there are 660 JCPenney locations across the US, including six in Puerto Rico.
Texas, California, and Florida have the most locations, with 73, 63, and 44 stores, respectively, in each state.
Alaska and Vermont have the fewest locations, with just one JCPenney store in each state.
Currently, Hawaii is the only state in the US without a JCPenney store.
In June 2024, JCPenney announced that it would shutter four more locations, including:
- Shoppes at Bel Air in Mobile, Alabama
- Sikes Senter in Wichita Falls, Texas
- Elm Plaza in Waterville, Maine
- Westfield Annapolis Mall in Annapolis, Maryland
The stores located in Alabama, Texas, and Maine will close by September 22, 2024, while the Maryland location will close sometime in 2025.
“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, as reported by Retail Dive.
“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," the company added.
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Who owns JCPenney?
Penney OpCo LLC, doing business as JCPenney and JCP, was founded on April 14, 1902, by James Cash Penney Jr.
In September 2020, Brookfield Asset Management and Simon Property Group agreed to purchase JCPenney.
By November 2020, the deal was approved, finalized, and purchased for $300 million in cash while also assuming around $500 million of JC Penney's debt.
“As a private company, JCP has the luxury of time and not having to drive profit growth,” GlobalData Managing Director Neil Saunders said.
“As long as the company is broadly profitable, its owners will take a long term view," he added.
Brookfield Property Partners L.P. is a global commercial real estate firm.
It owns and operates office buildings and retail, industrial, multifamily, and hospitality properties across the world.
Its portfolio also includes self-storage locations, manufactured housing communities, and student housing.
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Simon Property Group, Inc. is an American real estate investment trust.
Headquartered in Indianapolis, Indiana, the trust is the largest owner of shopping malls in the US and primarily invests in malls, outlet centers, and community and lifestyle centers.
