Struggling J.C. Penney to Shut Stores in Cost-Cutting Move
The struggling retailer will shut five department stores in locations including Morrow, Ga., and West Dundee, Ill., the company said in a statement. It will close a total of 19 outlet stores, as well as its call center facilities in Grand Rapids, Mich., and Albuquerque, N.M.
"The actions we are announcing today are significant steps in an ongoing process to ensure we are best managing costs and allocating our resources effectively," said CEO Myron E. Ullman.
J.C. Penney will initiate these actions over the course of 2011. The company will incur one-time charges of about 8 cents per share in the fourth quarter of fiscal 2010 and 5 cents per share in 2011 as a result of the transition. In 2012, the company expects a positive impact of 7 cents per share.
Also Monday, the company agreed to name activist investor William A. Ackman, founder and CEO of Pershing Square Capital Management, and Steven Roth, chairman of the board of Vornado Realty Trust, as directors.
Shares rose more than 3% in premarket trading.