JC Penney posts profits, plans to close up to 140 stores

WILMINGTON, NC (WWAY) — J.C. Penney plans to close as many as 140 stores across the country, even as the retailer announced it posted a profit in the fourth quarter.

J.C. Penney says the closures it announced Friday represent about 14 percent of its stores, but less than 5 percent of total annual sales. The Texas-based company says it expects the move to save it $200 million. The stores will close over the next few months, the company said.

“The stores identified for closure either require significant capital to achieve the Company’s new brand standard or are minimally cash flow positive today relative to the Company’s overall consolidated average,” a release from J.C. Penney said. “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. Once cycled, these closures are expected to be net income neutral.”

J.C. Penney has a store at Independence Mall in Wilmington. There’s no word yet if it will be impacted. The company says it plans to release a list of the closures in mid-March after it has a chance to notify employees who will be affected.

The news came as J.C. Penney posted a profit in the fourth-quarter compared to a loss a year ago, but sales for the quarter were down 0.9 percent from a year ago. Revenue at stores opened at least a year was down 0.7 percent.

Store closings has become a new norm among many retailers in recent years. Sears Holdings announced early this year that Wilmington’s Kmart is among 78 locations closing across the country by the end of March.