J.C. Penney said it anticipates that while it will incur charges of $26 million in the fourth quarter of its 2013 fiscal year, and $17 million in future periods as a result of the closings, the company will also see annual savings of $65 million.
At the end of its third quarter, which ended Nov. 2, J.C. Penney had approximately 1,100 stores, and its selling, general, and administrative expenses stood at $3.1 billion through the first nine months of the year.
"As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly," said J.C. Penney CEO Mike Ullman.
The closings are expected to be completed by May, with the inventory to be sold in the interim. J.C. Penney said approximately 2,000 positions will be lost, and employees who don't stay with the company will receive severance packages. The release also said the company still plans to open its store in Brooklyn later this year.
Ullman concluded by noting, "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."
The closed stores will be across 20 states, including five in Wisconsin, three in Pennsylvania, and two each in New Jersey, Mississippi, Indiana, Illinois, and Florida.