Stratford Square J.C. Penney to close
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J.C. Penney said Wednesday it will cut 2,000 jobs and close 33 stores as it tries to turn around results. The Stratford Square Mall store, which opened in 1988, will be closed around May 3 and affect about 130 workers, said J.C. Penney spokeswoman Ann Marie Bishop.
Bloomingdale Village President Franco Coladipietro said the announcement wasn't unexpected.
"It's obviously unfortunate news for our community," said Coladipietro, adding the company informed the village of the closure on Wednesday morning.
He said village officials had been following the retailer's financial situation.
"They've been struggling as a company for some time," he said. "There's been this expectation that the company just may not remain viable."
The village has positioned itself to look forward. Coladipietro said he recently spoke with Stratford Square's owners and is "very encouraged" by their plans for the mall. He said the space J.C. Penney occupies is owned by the mall.
"They are going to be able to control the redevelopment of that property and the use of that space," Coladipietro said.
Wednesday's announcement follows J.C. Penney's report earlier this month that it was pleased with holiday results but the company declined to give sales figures. A strong November and December are crucial to retailers since it can account for up to 40 percent of annual sales. The cuts are expected to save more than $65 million annually.
The company plans to take $26 million in charges in the third quarter and $17 million afterward.
Affected workers could receive separation benefits and assistance in finding another job at a nearby J.C. Penney store, Bishop said.
The company also is offering associates a two-day, on-site career training class where they can learn about writing resumes, filling out applications, answering interview questions and more, Bishop said.
Overall, J.C. Penney has about 116,000 staffers.
"We continually evaluate our store portfolio to determine whether there's a need to close or relocate underperforming stores," Bishop said. "Reviews such as these are essential in meeting our long-term goals for future company growth. While it's never an easy decision to close stores, especially due to the impact on our valued associates and customers, we feel this is a necessary business decision."
The closing of 33 stores sounds like not all is well, said Paul Swinand, an analyst for Morningstar Inc. in Chicago.
"It's also not a massive restructuring," said Swinand. Many of the stores on the list are in small markets at regional malls that most likely have declining visitors, so the closings may boost results, he said.
Of the stores being closed, two are owned by J.C. Penney, and the remainder are leases, Daphne Avila, a company spokeswoman, said in an email. The majority are the chain's smaller formats, she said. These locations, which total about 400, didn't get remodeled with branded areas for such brands as Joe Fresh and Izod.
The company in November reported its first gain in monthly same-store sales in almost two years amid rising demand for home products, men's apparel and women's accessories.
Macy's Inc. said last week that it would eliminate about 2,500 jobs and close five stores to help save $100 million a year. The cost reductions entail combining its Midwest and North regions, eliminating some merchandise planning and store positions as well as central office and administrative jobs.
Stratford Square Mall General Manager Doug Kiehn did not immediately respond to calls seeking comment.
•Associated Press and Bloomberg News contributed to this story.
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