State

Maine stores escape latest round of JC Penney closures

JC Penney stores in Maine will be spared during the latest round of closures that the ailing retail giant announced Thursday morning when it reported fourth quarter and annual financial results.

The retailer, which recently said it would stop selling appliances at the end of February, said it plans to close 18 stores, including the three announced in January, and another nine ancillary home and furniture stores.

“We are not making the full list of 18 stores closing publicly available, however I can confirm there are no stores closing in Maine,” JC Penney spokesman Carter English wrote in an email to the Bangor Daily News.

During a 2017 round of 140 store closures nationwide, the Rockland Plaza JC Penney store got the ax.

JC Penney renewed its leases for multiple years in both the Bangor Mall and the Aroostook Centre Mall last fall. Both malls have been up for sale.

It also has stores in Waterville’s Elm Plaza, the Auburn Mall and the Maine Mall.

In a U.S. Securities and Exchange Commission filing Thursday morning, the company said the stores identified for closure either require significant capital, are minimally cash flow positive or represent a real estate monetization opportunity.

Comparable sales for the closing stores are significantly below the remaining stores. The stores operate at a much higher expense rate given their lack of productivity, JC Penney executives told financial analysts on a conference call Thursday morning.

Workers affected by the store closures will receive separation benefits, help finding other jobs and outplacement services, such as resume writing and interview preparation.

During the first half of 2019, the company said it expects to record an estimated pre-tax charge of approximately $15 million related to the store closings.

Nearly all affected stores are expected to close in the second quarter of 2019.

“There are a lot of actions we need to take to repair the fundamentals of retail,” CEO Jill Soltau told the financial analysts.

Soltau, a former Joann Fabric and Craft store executive, took over as JC Penney’s CEO last October to turnaround the retailer, whose sales have been dropping as it fights to remain relevant to customers.

JC Penney reported net income of $75 million for the fourth quarter of 2018 compared to net income of $242 million in the fourth quarter of 2017. It also reported a net loss for the full year of $255 million compared to a net loss in 2017 of $118 million. The fiscal year ended on Feb. 2, 2019.

Net sales for the fourth quarter were down 9.5 percent to $3.67 billion compared to the fourth quarter of 2017. Full year net sales also were down by 7.1 percent to $11.66 billion compared to $12.55 billion in 2017.

In the fourth quarter of 2018 the top performing divisions were jewelry and men’s, women’s and children’s apparel.

This article originally appeared on www.bangordailynews.com.

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