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Wednesday, January 24, 2001
J.C. Penney to close about 50 department stores
No Coastal Bend stores will be affected; 3 in Texas to close
By David Koenig
Associated Press
PLANO - J.C. Penney Co. Inc. will announce this week that it will close about 50 department stores - though none in the Coastal Bend - as new management tries to repair the troubled retailer, officials said Tuesday.
The Plano-based retailer also will announce it is shuttering an undisclosed number of Eckerd drugstores, a spokesman said.
(Tim Lyons, J.C. Penney spokesman, told the Caller-Times that no closings are planned for the Coastal Bend. Tami Alderman, an Eckerd spokewoman, said between five and seven stores are planned to be closed throughout the country, but which ones and when they will close will be determined later this year.)
Penney has seen its market share slip for several years as it was outflanked by discounters and trendier retailers. Analysts say the company was slow to update its stores and suffered from poor marketing and stale merchandise.
Employees were told of the closings beginning late last week, and workers at some additional stores are still being notified this week, officials said.
Spokesman Tim Lyons said the stores targeted for closing were identified during an ongoing review of sales performance. He said disappointing holiday-season results - same-store sales fell 1.6 percent from December 1999 - were not a factor in determining which stores will be closed.
"These were underperforming stores," Lyons said. "It's tough for the stores that are being closed, but it was something we felt we had to do to begin to turn the business around."
The company has not disclosed how many employees will lose their jobs. Lyons said some employees will be offered jobs at nearby Penney stores but most will be offered severance benefits.
Penney has about 1,100 Penney stores, 2,600 Eckerds and 290,000 employees. It had 1999 sales of $32.5 billion.
Penney will close three stores in Texas - in Houston, Dallas and Irving. A full list of stores to be closed will be released this week, Lyons said. The timing of the store closings will vary because of lease considerations, but many will shut their doors this spring, he said.
Business writer Michael Hines contributed to this report.
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Scripps Howard newspaper.
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