J.C. Penney Postponing Store Closures

April 17, 2017 in Latest News

Thanks to higher sales at stores marked for closure, J.C. Penney has postponed plans to shutter 138 shops.

Company spokeswoman Daphne Avila told CNBC on Thursday that the locations J.C. Penney announced in March would be closed have since seen “better-than-expected sales and traffic.”

“This is not an uncommon response when you announce a store closure,” Avila added. “Local shoppers will come out for a variety of reasons — some out of nostalgia and some who are just looking for a great deal.”

As a result, J.C. Penney will start liquidating those stores on May 22 instead of April 17, as first planned. And stores will shutter by July 31, instead of mid-June.

“Meanwhile, it’s advantageous for the company to continue selling through spring and summer merchandise at current promotional levels by pushing liquidation back another month,” the company told the Dallas Business Journal.

J.C. Penney first announced in February plans to shut down 13 to 14 percent of its 1,014-store fleet, and two distribution centers in Lakeland, Florida, and Buena Park, California.

At the time, the Plano retailer said the stores it planned to shutter accounted for less than 5 percent of annual sales and no profit dollars.

Closing them is expected to generate annual savings of roughly $200 million, though J.C. Penney expects to incur $225 million in pre-tax charges during the first half of 2017.

J.C. Penney decided what stores to close after evaluating their financials and whether they met the “brand standard,” CEO Marvin Ellison said.

For the record, I think that 1,014 stores for J.C. Penney is too many, because we haven’t made the necessary investments in our store fleet the way we should,” Ellison said in January. “It’s a simple question: If we have a location that I wouldn’t want my children to work at, or wouldn’t want my wife to shop at, then we’re going to invest capital and ask if it fits the brand standard.”

 

Source:  SFBJ

Smaller Retailers Destined For Former ‘Big Box’ Stores

March 27, 2017 in Latest News

These are dark days for the traditional “big box” retailer.

Sears cast doubt this week that it could stay open, and that followed recent announcements by other struggling retail stalwarts Macy’s, J.C. Penney Co. and Kmart that they would be closing stores across the country in response to the fallout from a consumer shift to online shopping.

Electronics and appliances retailer hhgregg said this month it would be closing all 11 stores in South Florida; the announcement came less than a year after Sports Authority went out of business.

The retailers are vacating spaces of 25,000 to more than 100,000 square feet, forcing shopping center owners to find new tenants or new uses for the buildings.

More yawning spaces could be opening up around South Florida if Sears and Kmart sink amid heavy financial losses. According to their websites, Sears operates 15 locations (14 department stores and an outlet store) in Palm Beach, Broward and Miami-Dade counties. Kmart has seven stores in all three counties.

“This certainly is at the top of [landlords’] minds right now,” said Robert Granda, director of retail investment sales for the Franklin Street brokerage across South Florida. “The challenge in this changing environment is that there are not that many retailers looking to take so much space. There are a lot more tenants looking for 10,000 square feet or less than there are looking for 30,000 square feet or more.”

Alan Esquenazi, a partner at commercial real estate company CREC, agreed that a “resizing” of retail is happening across the nation.

“Bricks-and-mortar retail is unequivocally not dead,” he said. “But you have to be really sharp, really competitive. You have to offer the customer an experience, like Apple does. The retailers that are closing offered nothing different, and they were destined to fail.”

Granda, Esquenazi and other retail observers say one of the best options for landlords is to subdivide the big box buildings into smaller spaces for two or three new tenants.

That’s the plan at former Sports Authority stores in Pompano Beach and Boynton Beach, though the new tenants have not yet been announced, said Katy Welsh, senior vice president of retail services at Colliers International.

The Related Cos. of New York, which owns CityPlace in West Palm Beach, has not announced plans for the two-story, 108,000-square-foot Macy’s that’s due to close this spring. But analysts say filling that space with multiple tenants is a strong possibility.

“My guess is that CityPlace will subdivide that space downstairs, and there likely will be a food and entertainment use upstairs,” said Alan Bush, CEO of Northlake Partners, a retail strategy company based in West Palm Beach. “That combination provides the best return on investment for the landlord.”

Welsh said retailers most likely interested in taking at least part of the space in former big box stores include discount clothing chains Ross, TJ Maxx and Marshall’s as well as Home Goods and Orchard Supply Hardware.

Another possibility is the grocery store chain group, including Trader Joe’s and Lucky’s Market, Welsh said. Lidl, a German grocer, is headed to Florida after expanding into the Carolinas, Virginia and Texas, she said.

Movie theaters are another possibility, but they wouldn’t be an ideal fit in smaller, older centers, analysts say.

Landlords are eager to find new tenants at a higher cost per square foot to replace the retailer-friendly leases signed by Kmart and other chains many years ago, according to Welsh.

As a consumer, she said it’s hard for her to accept that Sears and other former retailing powerhouses are struggling to survive. But as a retail observer, she’s intrigued by what’s ahead.

“From a landlord’s perspective,” she said, “we’ve been waiting for the other shoe to drop for a long time.”

 

Source:  SunSentinel

JC Penney May Shutter More Stores, Focus On Omnichannel

January 23, 2017 in Latest News

jcpenneyJC Penney closed seven stores in 2016 and sold its headquarters, but it looks like those cuts weren’t enough as the firm floats the idea of shuttering more locations.

JC Penney CEO Marvin Ellison said the firm’s current 1,014 store count is too high and the company is debating closing those stores that don’t meet its “brand standard,” RetailDive reports. The announcement comes in the wake of JC Penney’s disappointing holiday results, where the company watched same-store sales fall 0.8% from last year’s levels.

Beyond simply closing stores, Ellison said JC Penney will to work closely with mall developers to bring all locations into the omnichannel age — a notion shared by most experts.

 

Source:  Bisnow

Big Box Retailer Pounces on J.C. Penney’s Closed Stores

January 26, 2015 in Latest News

jcpenneyWhen J.C. Penney Co. announced this month that it would shut 40 US stores, At Home Group Inc. saw an opening.

Executives at the retail chain, which sells home decor in warehouses and other large spaces, checked the list of targeted stores and called J.C. Penney within a few hours to express interest in buying some of them. It helps that At Home had already researched J.C. Penney’s more than 1,000 U.S. locations ahead of time, just as a shopper would gear up for a big sale.

“When they make that announcement, we already know the ones we want,” At Home Chief Executive Officer Lee Bird said in an interview. “That’s our Black Friday.”

In this era of shuttered storefronts and sluggish mall traffic, a handful of companies like At Home are taking advantage of the upheaval. As department stores and big-box chains increasingly focus on smaller stores, At Home is doing the opposite. Its 125,000-square-foot (11,600-square-meter) locations aim to wow customers with dizzying variety. Pottery Barn might have 60 types of rugs; At Home offers 600.

In addition to scouting the J.C. Penney locations, the company has added former Target, Sam’s Club, Sears and Kmart stores over the past few years.

Bird and his team are expanding carefully, though.

At Home, which is backed by private equity, collects data on store fleets and assigns a score to each location based on potential annual sales. So when a promising Sears store goes on the block, it doesn’t take long to spring into action.

At Home, which was called Garden Ridge until last year, has 81 locations — 20 of them in Texas. The chain added 18 of them last year, including one at a former J.C. Penney in Arizona. It also took over eight Kmart stores and a Sears location. Once the old department store vacates the premises, At Home can renovate the space and move in within four months of closing on the real estate.

“We do deals really fast — nobody wants to be jerked around,” said Bird, 50. “We’re at the point where we’re one of the first people they call.”

Bird, a former executive at Gap Inc. and Nike Inc., expects to have hundreds of stores in the U.S. by the time the current expansion is complete. At Home plans to add as many as 20 new locations this year and will boost the store count 20 percent annually for the “foreseeable future,” Bird said. Sales are growing at about the same pace, the company said.

The chain is owned by AEA Investors, a New York-based private-equity firm that bought the business in 2011. At Home wants to go public eventually, though there’s no timetable for that.

 

Source:  BOF