Former J.C. Penney Outlet Stores to Close; 1,400 Jobs Lost

JCPenney Outlet - Jamestown Mall
MikeKalasnik/Flickr
NEW YORK -- The new owner of J.C. Penney's former outlet store business said Tuesday that it will close all 15 locations amid a steep drop in sales. The move will mean the loss of 1,400 jobs.

The outlet stores, which are in 14 states, were purchased in October 2011 by SB Acquisitions from J.C. Penney (JCP) and rebranded JC's 5 Star Outlet.

"Going out of business" sales will start Wednesday, offering shoppers deeper discounts than the usual outlet prices of 25 percent to 75 percent off retail.

In a statement, Glen Gammons, the former head of the J.C. Penney Outlet store division, and CEO of JC's 5 Star Outlet, said closing the outlets was a painful decision.

"The closing of the outlets was necessitated by the precipitous decline of sales," Gammons said in a statement. "After exploring all the alternatives, we could no longer incur the losses resulting from the continued operation of the outlet stores."

The outlet stores trace their roots to the J.C. Penney Co.'s 1962 purchase of a Milwaukee, Wis., mail-order company, the General Merchandise Co. Penney realized the need for a process to sell overstocked and discontinued merchandise from its catalog and mail-order operations, and in 1963, opened its first new outlet store in Wauwatosa, Wis.

Before the acquisition by SB Acquisitions, Penney had designated them for closure.

Separately, J.C. Penney itself is trying to recover from a botched plan to transform its business by its former CEO Ron Johnson that led to disastrous results.

Johnson was ousted in April after only 17 months on the job and was replaced by Mike Ullman, who had been CEO from 2004 to late 2011.

Under Ullman, Penney is bringing back more frequent sales and basic merchandise eliminated by Johnson in a move to attract younger, more affluent shoppers. But the company is facing a rocky road as it heads into the crucial holiday shopping season.


Increase your money and finance knowledge from home

What Is Your Risk Tolerance?

Answer the question "What type of investor am I?".

View Course »

Small Cap Investing

Learn now to invest in small companies the right way.

View Course »

Add a Comment

*0 / 3000 Character Maximum

29 Comments

Filter by:
Arnie Raines

JC Penney promoted the progressive agenda and lost their family values they alienated their core customers and will never get them back, even though 5star was no longer jcp people associated then together

October 02 2013 at 8:59 AM Report abuse rate up rate down Reply
Holly

Why don't they start a new trend and impliment a new idea and slogan that their clothing and merchandise is only made in the USA and their business will jump 110%

October 02 2013 at 12:33 AM Report abuse rate up rate down Reply
ectullis

How can this be? The private sector is doing just fine. OMG

October 01 2013 at 11:23 PM Report abuse rate up rate down Reply
alamaden

We didnt need those jobs anyway.... I think that JC needs to go along with the fact I am glad that the other 15,000 small and large businesses that have gone under due to this Socialist Agenda that has run American Business offshore permanently means we can tax the tax that has been taxed and keep taxing the additional tax untill that tax is taxed out or we figure out how to tax all of the prior taxes with a new tax or get plane tickets to China, Japan, Vietnam, Taiwan, and see if we can get visas to get jobs there?.... Hey this is great!

October 01 2013 at 10:26 PM Report abuse rate up rate down Reply
Don E

Another one bites the dust. !!!!!!!

October 01 2013 at 9:55 PM Report abuse rate up rate down Reply
CMEL57

This is only the beginning. The full JC Penney store chain will be next to go out of business.

October 01 2013 at 8:12 PM Report abuse +2 rate up rate down Reply
1 reply to CMEL57's comment
gailneuman

You're probably right-very sad but they changed their products too much and substituted cheaper brands

October 01 2013 at 9:39 PM Report abuse +1 rate up rate down Reply
richard.marsden

The quality of manufactured merchandise went on a steep decline, when the manufacturing of name brand clothing, transferred out of the primary markets of China and Mexico to South Asia and Central America.

The merchandise available at most Mall Stores and Retail Outlets is unpurchasable: thin fabrics, low ink font graphics, hand sewn stitching with a common surger/sewing machine.

I recently went on vacation and stayed at a resort where all of the clients were inner city immigrant families from Cuba, Brazil and the Jewish NYC 5 Boroughs.

Regardless of their new found social status under Obama Nation, they had no clue as to the quality of their clothing being ridiculously low for people who boast Mass Affluent to High Net Worth Financials.

I simply went dressed in standard clothing styles priced $75-$175, which I purchased from Zappos and Neiman Marcus.

I have since raised the price range that I am currently purchasing to $100-$600.00 from the Zappos Mens Couture Lines and I visited the Bergdorf Goodman NYC Mens Store, in person, to hunt for designer quality goods made in Europe.

If they want to stay in business at JCP they need to return to Made in the U.S.A...

October 01 2013 at 7:08 PM Report abuse +1 rate up rate down Reply
propickup

they did it not to have to insure the employees. they might have tried to stick it out ,if they were not pressured to give employees benefits. Just my take on it and time will tell if others do the same.

October 01 2013 at 7:02 PM Report abuse -4 rate up rate down Reply
burt.constable1

Many stores are selling only foreign products that are pure junk to up the bottom line for the stores. A tshirt that should sell for 5 bucks is 10 bucks or more and they last about 4 weeks. It is capitalism at work. How can you pay a CEO 20 million a year without screwing the consumer. Well Pennys will bite the dust and some other junk store will open up

October 01 2013 at 6:49 PM Report abuse +4 rate up rate down Reply
burt.constable1

There is no hope for Pennys at this point. I went this weekend and they had nothing except things that would not fit. It was almost impossible to find anything since they went to micro brand corners

October 01 2013 at 6:46 PM Report abuse rate up rate down Reply