As part of its turnaround efforts, J. C. Penney will close 33 underperforming stores across the country. The move, which will result in the elimination of about 2,000 positions, is expected to result in an annual cost savings of approximately $65 million, beginning in 2014.
Penney said it expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods. The retailer noted it is continuing with plans to open a new store location later this year at the Gateway II development in Brooklyn, N.Y.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said Myron E. (Mike) Ullman, III, CEO of Penney. "While it’s always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position J.C. Penney for future success."
The remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May.
Penney has approximately 1,100 stores in the United States.