J.C. Penney to Shutter 33 Stores, Slash 2,000 Jobs

×
J.C. Penney to Shutter 33 Stores, Slash 2,000 Jobs
Mark Lennihan/AP
By Jennifer Booton

J.C. Penney (JCP) will fire 2,000 people and close 33 underperforming stores as part of a revamped turnaround plan it hopes will stem ballooning losses.

The struggling department-store chain said late Wednesday the move will generate annual savings of roughly $65 million beginning in 2014. Penney expects to incur charges of $26 million in the fourth quarter and $17 million in future periods related to severance and closure expenses.

"As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly," J.C. Penney CEO Mike Ullman said in a statement.

Shares of the retailer fell more than 2.5 percent to $6.83 in after-hours trade following the announcement. They have fallen more than 62 percent over the last 12 months.

The move comes nearly two months after the company reported a much deeper third-quarter loss on weaker-than-expected sales.

Penney says the remaining inventory in those stores will be sold over the next several months, with final closing anticipated by early May. It still plans to open a new store later this year in Brooklyn, N.Y.


Increase your money and finance knowledge from home

What Is Your Risk Tolerance?

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

View Course »

Behavioral Finance

Why do investors make the decisions that they do?

View Course »

Add a Comment

*0 / 3000 Character Maximum