J.C. Penney Co. Inc., Plano, Texas, said Thursday it will close 47 stores and cut as many as 5,565 or 1.5% of its jobs in an effort to revive its retail operations, hit hard by a slowing economy and fierce competition from discounters like Wal-Mart Stores Inc.
The announcement from Penney, the nation’s fifth largest retailer, was expected because word of the closures leaked out earlier this week when department store employees were told they would lose their jobs. The company has some 368,000 employees between its department store and drug store units.
Last year, Penney closed about 40 stores and cut 2,000 jobs, and its new chief executive, Allen Questrom, has said more cost cuts are needed.
Under the plan, J.C. Penney will shutter 44 department stores and three catalog outlet stores. About 5,000 store employees will be affected, but many will be offered positions at other Penney stores. The retailer is also cutting 300 jobs in its headquarters and field offices and 265 positions at its Eckerd drugstore chain.
The majority of the store closures are planned for the first half of 2001. Penney has about 1,100 department stores and over 2,600 Eckerd drugstores.
Apart from the restructuring, Penney is in the process of centralizing its purchasing and merchandising operations in an effort to become more competitive on issues like fashion and pricing.