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J.C. Penney targets 24 more U.S. stores for closure

By Clyde Hughes
The new closures are in addition to three announced last month. File Photo by Tannen Maury/UPI | <a href="/News_Photos/lp/c754c4e89decc3eee1456849a021094c/" target="_blank">License Photo</a>
The new closures are in addition to three announced last month. File Photo by Tannen Maury/UPI | License Photo

Feb. 28 (UPI) -- Retailer J.C. Penney announced Thursday it will close more than two dozen U.S. stores to go along with three others it marked for closure last month.

The retail chain said last month it would close the three unannounced locations in the spring as "part of an ongoing evaluation of [the] store portfolio occurring over the next few months."

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Thursday in its fourth quarter earnings report, J.C. Penney said 24 more closures will follow. It's not yet clear which locations will close.

The additional closures -- 15 full-line stores and nine ancillary home and furniture stores -- came about because those locations "either require significant capital, are minimally cash flow positive today relative to the company's overall consolidated average or represent a real estate monetization opportunity," the company said.

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"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."

The chain said total net sales for the fourth quarter decreased 9.5 percent to $3.67 billion, compared to $4.05 billion for the same period in 2017. It said the cost of goods took up 68.7 percent of sales ($2.52 billion), up 3 percent over 2017 ($2.69 billion).

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"As we forge a path to sustainable profitable growth, our decisions included eliminating non-core and low gross margin product categories, significantly reducing unproductive inventory and continuing the revitalization of our women's apparel business," J.C. Penney CEO Jill Soltau said.

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"We know we need to move faster to re-establish the fundamentals of retail, build capabilities focused on satisfying our customers' wants and needs."

The company's move followed a previous decision to end most appliances and furniture sales. Analyst Neil Saunders of GlobalData Retail said the retailer has given itself "very little time to course correct."

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