J.C. Penney to close 130-140 of its stores

HARLINGEN — J.C. Penney, with five stores in the Valley including one at Valle Vista Mall, announced Friday it will close between 130 and 140 stores this year.

A list of those stores will be made public in mid-March, company officials said in a statement.

The giant retailer, which has more than 1,000 stores in the United States, is the latest mall-based company to respond to soft earnings with store closings.

Sears Holdings, which includes the Sears and Kmart brands, announced plans to close 150 stores last month, and Macy’s is closing 68 stores and cutting 10,000 jobs.

The Limited closed all of its stores last month, and American Apparel filed for bankruptcy for a second time last year. Sports Authority went out of business following a bankruptcy filing last year.

Penney’s said it would offer early retirement to 6,000 full-time employees, although the company said it would re-hire new staff to fill those positions. Presumably, the pay rates of the new hires will be lower.

“In 2016, we achieved our $1 billion 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,” said Marvin R. Ellison, chairman and CEO of J.C. Penney.

Penney’s will close a distribution center in Lakeland, Fla., in June, and is in the process of selling its supply chain facility in Buena Park, California, in an effort to monetize a lucrative real estate asset, Ellison said.

The total store closures represent around 13 percent of the current number of Penney’s stores.

Almost all of the stores on the closings list will be shut down sometime between March and June, the company said.

Traditional brick-and-mortar retailers like Penney’s and others have been hit hard by competition from online sales.

“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers,” Ellison said.

Sales at Penney’s stores which have been open for more than a year fell 0.7 percent in the fourth quarter which ended Jan. 28, a bigger drop than the 0.5 percent decrease analysts predicted.