J.C. Penney to close 13 to 14 percent of stores

NEW YORK (AP) — J.C. Penney said today it will be closing anywhere from 130 to 140 stores as well as two distribution centers over the next several months as it aims to improve profitability in the era of online shopping.

The closures represent about 13 percent to 14 percent of the department store operator's current store count, and less than 5 percent of total annual sales. The company said that it would also initiate a voluntary early retirement program for about 6,000 eligible employees.

The news came as the Plano, Texas-based chain posted a profit in the fourth-quarter compared to a loss a year ago. But total sales were down slightly, and a key revenue metric declined slightly as well.

Penney has been recovering from a catastrophic reinvention plan under former CEO Ron Johnson that sent sales and profits into a free-fall in 2012 and 2013. Business stabilized under Mike Ullman, who took the helm in 2013 after Johnson was pushed out.

Under Marvin Ellison, who has been CEO since 2015, Penney is looking for new ways to increase sales while improving its e-commerce. But while annual sales still shrunk, what's encouraging is Penney's profit picture. Penney was able to pull in a $1 million profit for the full fiscal year, the first time it earned an annual profit since 2010.

Like other department stores, J.C. Penney is trying to adjust to changing shopping patterns, and is joining other department stores like Macy's, which are shrinking their store footprint.

Consumers are shifting their spending away from clothing and toward experiences like beauty treatments or toward furnishing their home. And when they do pick up clothing, it's more often at off-price stores or online as Amazon moves more into apparel.