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It’s not news that department stores and mall brands are struggling, and this morning, another retailer added itself to the list of those taking major cost-cutting measures in order to survive. J.C. Penney has just announced that it will close between 130 and 140 stores and two distribution centers, and lay off about 6,000 employees, according to multiple outlets.
The store closures make up 13 to 14 percent of its total brick-and-mortar locations, while the 6,000 workers who will be offered buyouts include those in the retail, supply chain, and corporate departments.
J.C. Penney CEO Marvin Ellison openly attributed the move to competition from online retailers in a statement. "We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers," he said. The company expects an annual savings of about $200 million — an important move considering revenues were $3.96 billion in the fourth quarter, versus the expected $3.98 billion, according to Reuters.
But despite how bad cutting stores and employees sounds (and is, for the workers affected), it’s not all bad news: After Macy’s said that it would close 68 stores and cut more than 10,000 jobs, the cost-cutting measures appear to have helped, proving that the secret to surviving as a department store may just be blowing yourself up.
That said, closing stores hasn’t necessarily worked for Penney’s before. But after other attempts to get new shoppers in the door and grow the business have fallen short — remember its Joe Fresh shops-in-shop? Its partnership with Mango? The InStyle-branded salons? Oh, and the Sephora boutiques it’s still got going? — it seems like J.C. Penney is back to less exciting methods to save itself.