J.C. Penney is trying to save $200 million by closing down between 130 and 140 stores, according to a report by Yahoo Finance. The retailer is hoping that shuttering more than a hundred of its stores will help it focus more on stores that show strong sales during the previous quarter.
J.C. Penney announced the plan to close up to 140 of its stores just as it reported its financial results for the fourth quarter and full year of 2016. The retailer's financial results reportedly exceeded the expectations of analysts, but they were not enough to alleviate investors' concerns about its profitability since revenue and sales both dropped year over year.
Speaking on behalf of J.C. Penney, Neil Saunders, managing director of GlobalData Retail, said the drop in sales is not that huge and pointed out that the retailer exceeded the performance of its competitors. Although revenue and sales have been weak, Saunders expressed confidence that the retailer's turnaround plan is working.
Fortune reported that J.C. Penney's financial results have been suffering ever since it failed to cater to the hip crowd since 2012. The retailer already warned last year that it might need to close its stores, but it delayed the plan as they are reportedly critical to operations. However, weak sales and revenue in several stores have finally pushed the retailer to shutter them.
J.C. Penney is not the only retailer that has been suffering all this time. Its competitors including Macy's and Sears all closed some of their stores last year due to poor sales.
The lagging sales of retailers can be blamed on the change in customers' preference. More and more people are reportedly choosing not to buy from mall shops.
Jobs & Hire reported that restaurants are also affected by closures, with several Outback Steakhouse, Bonefish Grill, Carrabba's Italian Grill And Fleming's Prime Steakhouse locations expected to close this year.