Penney to close Kent store
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J.C. Penney plans to shut as many as 50 department stores, including the 43-year-old store in downtown Kent, as part of Chairman Allen Questrom's strategy to cut costs and revive profits.
The closings will occur across the U.S., spokesman Tim Lyons said. The Kent store is the only one of about 30 Penney stores in Washington to be closed, Lyons said, adding that the other closures are a mix of stores in downtown areas and in malls. J.C. Penney hasn't decided how many jobs will be cut, he said.
The manager of the Kent store, Sharon May, said the news was a "a big blow to customers and associates," but at 22,000 square feet, it is part of a dying breed of small, downtown Penney stores. Newer mall stores can be more than 170,000 square feet.
The Kent store on West Meeker Street is scheduled to close in late April, she said. There has been a J.C. Penney store in downtown Kent since 1929, Lyons said. Nearby Penney stores that will remain open include those at Southcenter and South Hill Mall in Puyallup.
Questrom, who was hired in September, is trying to help J.C. Penney find a niche between discounters, such as Target, and higher-price department stores, analysts have said. He led Federated Department Stores out of bankruptcy in 1992, and investors and analysts are looking to him to reverse five quarters of falling profit or losses.
"They have problems, and compounding the problems was a really weak Christmas for everybody, a slowing in the economy and (slowing) consumer spending," said Standard & Poor's Equity Group analyst Karen Sack, who rates the stock "neutral."
J.C. Penney shares rose 25 cents to $12.50. The stock had dropped 84 percent from a high of $78.75 in June 1998, and last month fell to $8.63, its lowest price in about 19 years.
The Plano, Texas-based company has about 1,100 department stores in 50 states and 2,600 Eckerd drugstores in the Southeast, Northeast and Sun Belt states. It employs about 290,000 workers.
J.C. Penney's last big round of closings - 45 department stores and 279 Eckerd drugstores - was announced 11 months ago under former Chairman James Oesterreicher, who resigned in May.
The exact number of store closings in this latest round is "still a moving target," spokesman Lyons said.
"Some people will move to other stores, so hopefully, we'll be able to save some jobs there," Lyons said. In earlier closings, more than 1,875 department-store employees and 600 Eckerd workers were fired, according to a December regulatory filing.
Questrom, who also is chief executive, has said in recent months that additional closings may be possible. Questrom built his reputation as a turnaround specialist after leading Federated, owner of the Macy's, Lazarus and Rich's chains, from bankruptcy and putting Barney's New York back on track.
Seattle Times business news reporter Bill Kossen contributed to this report.