Local store management could not immediately be reached for comment this morning. A PDF on the company’s website does list the Roanoke Rapids store as one of those which will close.
In all, the company plans to close 138 stores, one supply chain facility in Florida and relocate a supply chain facility in California.
Approximately 5,000 positions nationwide will be impacted by the store closures, most of which will occur in June.
The company said on its website it is in the process of identifying relocation opportunities for “esteemed leaders” in the company.
Most affected stores will begin the liquidation process on April 17.
In its original news release on the closings the company announced last month it was implementing a plan to optimize its national retail operations as part of the company’s successful return to profitability.
“In 2016, we achieved our $1 billion earnings before interest, taxes, depreciation and amortization target and delivered a net profit for the first time since 2010; however, we believe we must take aggressive action to better align our retail operations for sustainable growth. During the year, it became evident the stores that could fully execute the company’s growth initiatives of beauty, home refresh and special sizes generated significantly higher sales, and a more vibrant in-store shopping environment,” said Marvin R. Ellison, chairman and chief executive officer of JCPenney. “We believe the relevance of our brick and mortar portfolio will be driven by the implementation of these initiatives consistently to a larger percent of our stores. Therefore, our decision to close stores will allow us to raise the overall brand standard of the company and allocate capital more efficiently.”
He said in the statement, “We understand that closing stores will impact the lives of many hard working associates, which is why we have decided to initiate a voluntary early retirement program for approximately 6,000 eligible associates. By coordinating the timing of these two events, we can expect to see a net increase in hiring as the number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures.”
The total store closures represent approximately 13 - 14 percent of the company’s current store portfolio, less than 5 percent of total annual sales, less than 2 percent of EBITDA and zero percent of net income.
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.
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.
The annual cost savings resulting from these strategic decisions, primarily occupancy, payroll, home office support, corporate administration and other store-related expenses, are estimated at approximately $200 million.
During the first half of 2017, the company expects to record an estimated pre-tax charge of approximately $225 million, primarily lease termination obligation expenses, non-cash asset impairments and transition costs, in connection with this initiative.
Nearly all impacted stores are expected to close in the second quarter of 2017.
“I have a deep appreciation and respect for our associates who are on the front lines working tirelessly to serve our customers every day. Closing a store is never an easy decision, especially given the local impact on valued employees and our most loyal shoppers,” said Ellison. “While any actions that reduce or exclude our presence in communities across the country is always difficult, it is essential that JCPenney continues to evolve in order to achieve long-term growth and profitability and deliver on shareholder value.”