HAMILTON TOWNSHIP — Three months after the last merchandise crept off the shelves at the former Sears, the Hamilton Mall has confirmed another big-name department store will close.
J.C. Penney will close its Hamilton location July 5, Crystal Rodriguez, the mall’s marketing manager, said Thursday.
“This decision is the result of an ongoing review of our store portfolio, which includes assessing locations that may not meet our required financial targets or represent an opportunity to capitalize on a beneficial real estate asset,” the company said in a statement. “It’s never easy taking actions that directly impact our valued associates and customers, however we feel this is a necessary business decision.”
J.C. Penney is closing more stores following a weak holiday sales season for the retailer.
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The department store said Thursday it would turn the lights out at 18 total locations, including three that were announced last month. It will also close nine home and furniture stores.
“It’s really sad to see all the stuff closing,” said shopper Brianna Burke, 33, adding she’d been coming to the mall since she was 10. “The mall is gonna be empty.”
“I think it’s gonna be a blow to the economy in terms of a lack of variety of shopping, convenience and for employment,” said Paula Davis, 64, who also was at the mall Thursday afternoon.
Davis said she prefers to be “physically in a store,” that while she does shop online, she wants to “see the quality of (clothing) and touch it.”
Net income at J.C. Penney tumbled nearly 70 percent, and a key measure for health dropped 4 percent in the fourth quarter, the most crucial period of the year for retailers who bank on strong holiday sales.
The company did top expectations for fourth-quarter results, and under new CEO Jill Soltau, the department store rid itself of unprofitable inventory and said it will have positive free cash flow this year.
Shares jumped more than 22 percent Thursday, its second-biggest one-day gain.
Soltau, who came on board in October, faces numerous challenges in avoiding the fate of Sears and other retailers that have filed for bankruptcy protection, or vanished.
Under Soltau, J.C. Penney jettisoned major appliances, which accounted for 2.7 percent of the company’s sales last year, but dragged on the company’s operating profit.
It’s focusing instead on women’s clothing and goods for the home such as towels or bedsheets, which carry higher profit margins. Furniture is still available, but only online.
That reverses the course followed by predecessor Marvin Ellison, who three years ago began selling major appliances again in an attempt to capitalize on problems at Sears.
In a conference call Thursday, Soltau said she has spent time with customers, suppliers and workers and she said she’s convinced that the company can establish a path of “sustainable profit growth.”
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Changes will be swift, methodical and based on what customers want and expect from J.C. Penney, Soltau said. “This is not business-as-usual,” she said during a conference call Thursday. “Our current reality is clear.”
Department stores like J.C. Penney are trying to reinvent themselves in an era when Americans are buying more online or turning to discounters like T.J. Maxx for clothing.
Bringing back shoppers has proved exceedingly difficult, even for iconic brands.
Momentum appears to be slowing at Macy’s, soon to be the Hamilton Mall’s last remaining major department store. Fourth-quarter results showed weaker profit and total sales, as well as meager growth in sales at established stores, a key measure for a retailer’s health.
The path back to prosperity appears especially tenuous for J.C. Penney. It is trying to claw its way back after a disastrous reinvention plan in 2012 by its former CEO Ron Johnson, who dramatically cut back on promotions and brought in new brands to attract young shoppers.
Sales at J.C. Penney went into a freefall, it suffered massive losses and once-loyal customers moved on.
That situation has stabilized, but establishing an identity in a retail landscape that has undergone seismic changes continues to elude the retailer.
”The central problem for (J.C. Penney) is that it no longer gives shoppers reasons to visit stores and to make purchases,” said Neil Saunders, managing director of GlobalData Retail. “In other words, it has lost sight of why it exists. This is evident across both stores and online, where a hodgepodge of products are thrown together in a seemingly random fashion.”
The company reduced inventory by 13 percent last year, and that will continue throughout 2019. Soltau said more uncluttered stores will allow people to find what they want more easily.
The Associated Press and intern Shannon Joyce contributed to this report.