Los Banos J.C. Penney’s store among first 154 locations closing due to bankruptcy
Following its May announcement that J.C. Penney will be closing some stores due to Chapter 11 bankruptcy, the department store chain announced Thursday that 154 locations across the U.S. will be shutting their doors — including one Merced County destination.
The Los Banos J.C. Penney at the San Luis Plaza is among those that didn’t make the cut, according to a list released by the 118-year-old Plano, Texas-based company. Also on the chopping block is the nearby Turlock J.C. Penney at Countryside Plaza.
J.C. Penney’s stores at the Merced Mall and Fashion Fair Mall in Fresno were not listed among the closures.
Eight locations are set to close in California. Closing sales are expected to begin June 12 and take 10 to 16 weeks.
More J.C. Penney’s closing
Additional store closure announcements are coming soon, a J.C. Penney news release said.
“The company expects additional phases of store closing sales will begin in the coming weeks,” the release said. “As the company remains focused on its Plan for Renewal and driving sustainable, profitable growth, it intends to reduce its store footprint and focus resources on its strongest stores and powerful eCommerce flagship store, jcp.com.”
The decision to close which stores was reached by evaluating J.C. Penney’s retail footprint, an analysis of store performance and store’s future strategic fit for the company, according to the company.
“While closing stores is always an extremely difficult decision, our store optimization strategy is vital to ensuring we emerge from both Chapter 11 and the COVID-19 pandemic as a stronger retailer with greater financial flexibility to allow us to continue serving our loyal customers for decades to come,” said Jill Soltau, chief executive officer of J.C. Penney, in the release.
According to its website, there are 846 J.C. Penney stores across the U.S. As of Thursday, nearly 500 store locations have been reopened since closing during the coronavirus pandemic.
Can J.C. Penney’s survive?
But many experts are pessimistic about Penney’s survival even as it sheds its debt and shrinks the number of its stores, the AP recently reported. Its fashion and home offerings haven’t stood out for years. And moreover, its middle-to-low income customers have been the hardest hit by massive layoffs during the pandemic. Many of them will likely shop more at discounters — if they shop at all, analysts say.
“This is a long, sad story,” said Ken Perkins, president of retail research firm Retail Metrics, in the AP report. “Penney offers no reason to shop there compared to its competitors, whether it’s Macy’s or T.J. Maxx or Walmart. How are they going to survive?”
Like many department stores, Penney’s is struggling to remain relevant in an era when Americans are buying more online or from discounters. Sears has now been reduced to a couple hundred stores after being bought by hedge fund billionaire and its former chairman Eddie Lampert in bankruptcy in early 2019. Barneys New York closed its doors earlier this year and Bon-Ton Stores went out of business in 2018.
The pandemic has just put department stores further in peril as they see their sales evaporate with extended closures. Even as retailers like Penney’s start to reopen in states like Texas and Florida that have relaxed their lock downs, they’re also facing Herculean challenges in making shoppers feel comfortable to be in public spaces.
The company has suffered five straight years of declining sales, which now hover around $11.2 billion, the AP reported. Its shares are trading at less than 20 cents, down from $1.26 a year ago, and from an all-time peak of $81 in 2006.
AP reporter Anne D’Innocenzio contributed to this report.
This story was originally published June 5, 2020 at 12:13 PM with the headline "Los Banos J.C. Penney’s store among first 154 locations closing due to bankruptcy."
