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J.C. Penney Co. plans to exit outlet business
Future of Martinsville store unsure, official says
The JCPenney Outlet Store at Liberty Fair Mall in Martinsville is seen Monday afternoon. J.C. Penney Co. announced Monday that it will close its outlet stores this year and next. The future of the Martinsville store is unsure, a company spokesman said. (Bulletin photo by Eliza Winston)
Tuesday, January 25, 2011
By FROM BULLETIN AND AP REPORTS -
J.C. Penney Co. announced plans Monday to exit its outlet store business for financial reasons, but a company spokesman said the fate of each store - including the one in Martinsville - has not yet been decided.
Tim Lyons, a spokesman for the Plano, Texas-based company, confirmed that all Penney outlets, including the one at Liberty Fair Mall, will stop operating as outlets in 2011 or 2012. He could not be more specific, he said.
"No individual store decisions have been made yet," Lyons said. "All of our options are under review."�
"Closing is one option," he said, adding that others include converting the outlet stores into full-fledged department stores, and selling or leasing their spaces to other retailers.
The Liberty Fair Mall store originally was a JCPenney department store but later was converted into an outlet store. A component of the local store is a returned clothing store that operates in a separate part of the mall.
Lyons said he did not know if the fact that it was converted into an outlet store would hurt the Martinsville store's chances of becoming a department store again.
Carol Morris, manager of the Martinsville store, said she was not authorized to discuss the situation. She referred inquiries to company headquarters.
Morris said the local store employs about 42 people. Lyons said he did not know how those employees will be affected.
Cathy McGrady, manager of Liberty Fair Mall, could not be reached for comment Monday.
J.C. Penney Co. also announced plans Monday to close five of its department stores, including one at Oak Hollow Mall in High Point, N.C. Also closing will be a furniture outlet and a JCPenney Home Store, plus the company's catalog business and two call centers.
The outlet stores operate as part of the catalog business division, according to a company news release.
J.C. Penney Co. said its plans are intended to boost profitability and keep pace with customers' increasing shift to online purchases.
J.C. Penney has been working to close the catalog business for some time, announcing in November 2009 that it would stop publishing its twice-yearly "big book" catalogs.
Chairman and CEO Myron E. Ullman III admitted during a conference call that the retailer's business started to shift heavily away from catalog to online about two years ago.
"We didn't give up on the catalog. The customer did," he said.
J.C. Penney started a review of its operations in August, and Ullman said the company knew it wanted to make changes coming out of the recession.
The company had faced potential pressure from William Ackman's Pershing Square Management and Vornado Realty Trust. Both Ackman and Vornado Chairman Steven Roth are joining Penney's board, the company announced Monday.
J.C. Penney did not disclose how many jobs will be lost within the company. The chain runs more than 1,100 department stores in the U.S. and Puerto Rico.
The moves will add about 7 cents per share to Penney's 2012 earnings, the company said. The retailer will take charges of about 8 cents a share in the fourth quarter and 5 cents per share in 2011 related to the actions.
J.C. Penney shares surged 7.4 percent, or $2.25, to $32.59 in midday trading. The stock has traded between $19.42 and $35.12 over the last year.