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Shutting New Jersey stores part of JC Penney's business planning

JC Penney is struggling to reorganize its operations after nine straight quarters of losses. To that end, its business planning includes the closing of 33 of its stores, including two here in New Jersey. The closures are scheduled to be completed around May of this year and consist of approximately 3 percent of the national chain's stores.

Reportedly, nearly 2,000 people will lose their jobs because of the closures. The company plans to give those employees severance packages, the details of which were not disclosed. In the meantime, the affected stores will sell off existing inventory. It is estimated that closing these stores saves the company somewhere in the neighborhood of $65 million this year.

In April, the CEO of JC Penney was replaced due to a 25 percent drop in sales and losses of $985 million in the company's last fiscal year alone. The former CEO attempted to revive the company by ending sales and promotions in favor of a boutique style shopping experience. The numbers show that these strategies failed miserably. Since April, the new CEO has restored commissions for salespeople and increased the company's liquidity to $1.7 billion.

JC Penney is not the only national retail chain whose business planning includes store closures in order to save money. Macy's announced the closure of five of its stores after a disappointing holiday shopping season. Sometimes, the economic climate necessitates scaling back a business in order to give it the best possible chance of survival. Undoubtedly, the recession and unforeseen events like Hurricane Sandy forced at least some New Jersey businesses to make the same sacrifices in order to have a second chance at success.

Source: nj.com, J.C. Penney to close two stores in New Jersey as part of company turnaround, Tom De Poto, Jan. 16, 2014

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