The retail sector is undergoing a deep transformation affecting historic companies like JCPenney. Consumption habits have changed drastically in recent years, altering the commercial landscape. This is creating uncertainty for both consumers and businesses struggling to keep relevant.
JCPenney, a chain that was once a pillar of American retail, has announced the permanent closure of more stores tomorrow, May 25. This measure responds to different factors, including the expiration of lease agreements and market fluctuations. The affected stores are located in shopping malls, places that have seen a notable decrease in foot traffic.
Stores that will close and reasons for the closures
The branches that will cease operations are in seven states. San Bruno (California), at The Shops at Tanforan; Denver (Colorado), at The Shops at Northfield; Pocatello (Idaho), at Pine Ridge Mall; Topeka (Kansas), at West Ridge Mall; Newington (New Hampshire).
Also at Fox Run Mall; Asheville (North Carolina), at Asheville Mall; and Charleston (West Virginia), at Charleston Town Center. Since 2020, JCPenney has closed around 200 stores following its bankruptcy process, and this round of closures adds to that number, according to The Sun.
A company spokesperson clarified that these closures do not reflect financial problems but are due to the expiration of rental contracts and changes in market conditions. However, the reality shows that the traditional mall model is in decline. The growing preference for online shopping has significantly reduced traffic in these spaces, affecting many store chains.
Additionally, inflation and the constant rise in the cost of living have influenced consumer behavior, who now prioritize physical visits less and seek more accessible deals. All this creates a complex scenario for JCPenney and other retailers trying to adapt to these structural changes in the industry.
Strategy and future of JCPenney in a changing market
To try to face these challenges, JCPenney joined other brands like Aéropostale, Brooks Brothers, and Eddie Bauer to form Catalyst Brands, an alliance to strengthen its position. This group is led by Marc Rosen, former CEO of JCPenney, and aims to renew these brands with a more modern vision adapted to the current context.
However, retail experts are cautious about the success of this reinvention. Neil Saunders, an analyst at GlobalData, points out that JCPenney is in a transition stage with inconsistent progress. The American retail sector faces an unprecedented crisis: in 2024, it is expected that more than 15,000 stores will close their doors, following a record of more than 7,000 in 2023.
This context forces JCPenney to accelerate its transformation process to avoid falling behind. Meanwhile, customers only have a few hours to take advantage of clearance sales at the stores that will close tomorrow.