Monday's announcement that JCPenney will soon shutter its poor-performing store in West Dundee marks the end of an era at Spring Hill Mall.
JCPenney, which moved to the mall in 1983, was one of its original anchors and one of the village's biggest money makers. Over the last 12 months, it brought in more than $250,000 in sales tax -- the village last year took in a total of $5 million in sales tax from all its businesses, Village Manager Joe Cavallaro said.
JCPenney Co. is eliminating its catalog business and closing some stores, including the one in West Dundee, outlets and call center locations in an effort to streamline operations and boost profits.
The West Dundee store, slated to close June 1, employs 157 people, said Joey Thomas, a JCPenney spokesman. Some will receive separation packages, but Thomas declined to detail the agreements or say how many people qualify for them. The company will also help displaced employees find jobs locally, whether it's with Penney's or elsewhere, Thomas said.
The company is closing other stores closing in Morrow, Ga.; Des Moines; High Point, N.C.; Culpeper, Va.; and Duluth, Ga.
"We continually review our underperforming stores to help ensure that we develop a high level of performance across the store's organization," Thomas said.
There's a JCPenney store not too far away from West Dundee.
In 2008, the retailer opened a 103,525-square-foot stand-alone store on busy Randall Road in Algonquin. That store is not slated for closure and Thomas declined to say whether that one met the company's profitability threshold.
Shoppers, meanwhile, were having mixed reactions to the news Monday.
Nicole McClanahan, 28, of Elgin, says her family has shopped at the West Dundee store all her life. She was not surprised to hear the store is closing, since there's is a new Penney's nearby. But she thought the West Dundee store was still holding its own.
"It's always crowded," she said. "We always see people in there, especially on the weekends."
Georgia Montalbano, another JCPenney shopper from Elgin, said she will be sorry to see the West Dundee store go and thought its good prices were helping it meet revenue requirements. She also said she prefers the West Dundee store's atmosphere.
"They opened up the store on Randall Road, but I like the West Dundee store," Montalbano said. They (the staff) are friendlier."
JCPenney appears to be following a trend that other businesses started at and around the mall.
Within the last few years, Famous Dave's BBQ Restaurant, Toys R Us, TJ Maxx and the Gap are examples of businesses that also left the mall or its vicinity for Randall Road.
General Growth Properties owns Spring Hill Mall and its general manager says Penney's looming departure has nothing to do with the mall itself.
"This is a business decision that was made at the highest levels of JCPenney and is no reflection of Spring Hill Mall," Spring Hill General Manager Amy Prew said via e-mail. "We certainly are saddened to see any retailer close its doors. Finding a replacement is priority for us. It's our commitment to provide only the best in retail and entertainment for our shoppers."
Cavallaro said he always feared Penney's would leave once it built the new store in Algonquin. But he was hopeful it would stick around, since it owns the space it occupies and does not pay a lease.
The store, along with Macy's, Sears, Target and Best Buy, is one of the biggest sales tax generators in West Dundee, he said.
Its absence won't become an issue until the next fiscal year, unless the village secures another tenant for the 138,651-square foot anchor space. Cavallaro also said the retailer's "disheartening" loss also becomes an issue for neighboring Carpentersville, which shares a portion of the mall with West Dundee.
"All those businesses in that area speak to the overall health of the Spring Hill Mall," Cavallaro said.
"The Penney's relocation will not just affect West Dundee. It affects the Spring Hill Mall area."