Retail stores across the country are feeling the impact of the rise of online shopping, declining foot traffic at physical locations, and consumers who are feeling the pinch of inflation.
JCPenney, a once-thriving department store chain, is the latest retail giant to announce store closures as they struggle to keep up with the changing retail landscape.
The decline in sales for JCPenney began in the 2000s as other major retailers like Target and Walmart continued to grow and attract customers.
The rise of online shopping further contributed to the decline of traditional brick-and-mortar stores, leading to the closure of many malls across the country.
The Covid-19 pandemic was the final blow for JCPenney, as they were forced to close virtually all of their stores during the nationwide lockdown.
After filing for Chapter 11 bankruptcy protection in May 2020, JCPenney began a store optimization strategy to try to turn things around.
However, the company still faced declining foot traffic and sales, both in-store and online. Despite being bought out of bankruptcy at the end of 2020, JCPenney continued to struggle, with net sales dropping 5.9% year-over-year in the latest quarter.
Currently, there are 660 JCPenney locations across the US, down from over 2,000 at its height in 1973. The latest round of store closures will see four more locations shutting their doors, including the Shoppes at Bel Air in Alabama and Sikes Senter in Texas.
These closures are part of the company’s efforts to manage risks and stabilize the business in the face of a challenging retail environment.
JCPenney is now owned by Penney OpCo LLC, a company founded by James Cash Penney Jr. in 1902. Brookfield Asset Management and Simon Property Group purchased the company in September 2020, with the deal being finalized for $300 million in cash.
As a private company, JCPenney now has the luxury of time to try to turn things around and adapt to the changing retail landscape.
Despite the challenges, JCPenney remains optimistic about a second-half recovery and is focused on delivering value to its customers.
The company encourages customers to shop at their other locations or online as they continue to navigate the ever-changing retail landscape.
