Gap announces closure of 230 stores, JCPenney to close 27 as quarterly sales drop
Longstanding retail mainstays JCPenney and Gap announced store closures Thursday as the companies’ sales have dropped.
Gap announced the closure of 230 stores in a news release that projected the locations to shut down over the next two years.
JCPenney said in a news release that it plans on closing 18 full-line stores this year, including three locations that had been announced recently, along with nine home and furniture stores.
“The stores identified for closure either require significant capital, are minimally cash flow positive today relative to the company’s overall consolidated average or represent a real estate monetization opportunity,” JCPenney said in the release. “Comparable sales performance for the closing stores was significantly below the remaining store base and these stores operate at a much higher expense rate given the lack of productivity.”
JCPenney reallocate resources to locations that offer long-term potential, while employees at the closing stores will receive separation benefits, according to the release.
The stores are expected to close by the second quarter of 2019.
JCPenney’s 2018 fourth quarter net sales fell 9.5 percent from 2017, dropping from $4.05 billion to $3.67 billion, according to the release.
The company’s net sales for the 2018 fiscal year amounted to $11.66 billion, a decrease of 7.1 percent compared to $12.55 billion in 2017, according to the release.
Gap also announced it would be splitting into two distinct, publicly traded companies — the already established Old Navy and a new company that has yet to be named, which will include Gap, Athleta, Banana Republic, Intermix and Hill City brands, according to the release.
“While stores are an important part of the customer journey, the company is actively working on multiple initiatives to revitalize the Gap brand by re-engaging with customers and expanding its loyal customer base, leveraging the multigenerational, democratic appeal of the brand,” Gap Inc. said in the release.
Gap’s 2018 fourth quarter net sales came in at $4.6 billion, a 7 percent decrease from the previous year, but its 2018 total net sales, at $16.6 billion, showed a 1 percent increase from 2017, according to the release.
There are Gap stores at the Arden Fair Mall, the Westfield Galleria and Folsom Premium Outlets. There are JCPenney stores at the Arden Fair Mall, the Sunrise Mall, the Westfield Galleria and the County Fair Mall in Woodland. It was not immediately clear which stores would be closing.
This story was originally published February 28, 2019 at 6:00 PM.
