Another big retailer soon to close many of its stores is the beloved JC Penney.
Initially, “140 stores” sounds like a lot of doors closing all at once. However, the brand has close to 1,100 stores in all 50 states. JC Penney recently sold its enormous corporate office headquarters in Plano, Texas for a cool $353 million to help offset some of its debt.
The retailer has suffered years of declining sales and is desperately trying to stay afloat.
CEO Marvin Ellison stated, “proceeds from the sale give us the opportunity to reduce outstanding debt.” That outstanding debt is up to $4.5 billion. Sales of the corporate offices and underperforming stores were necessary to ease some of the financial strain. Struggling stores have been more like dead weight to the company over the years.
JCPenney has spent the last few years trying to get back on foot from major damage done by former CEO Ron Johnson. The mistakes he made cost the retailer billions, and they never fully recovered. Johnson came in with ideas to make Penney less of a discount retailer and instead trendier in style (and price), which ended up costing the customer more money.
This angered long-standing, loyal customers who were likely on a budget or a fixed income. The plan also failed to entice the millennial crowd into becoming regular customers. Johnson admits he may have moved too quickly implementing his ideas, but he says the store’s failure is due to their culture being resistant to change. Johnson was brought in because of his previous success in leading growth and sales of Apple and Target stores.
He was not successful in leading JCPenney. However, he still believes the company would have been a lot better off following his plan. Meanwhile, Ellison is busy trying to fix the problems created, as well as trying to figure out the next step for JC Penney, a retailer who has been around for more than 114 years.
How does it make you feel to see yet another retail store chain close many of its doors? Let’s discuss here or on Twitter: @lcarterwriter.