‘A 121-year-old company became a part of corporations that are going out of business in 2020’. This headline made a ruckus among its customers. However, this was back in 2020, so how is the company doing now? Is JCPenney going out of business 2023?
JCPenney is not just another company facing challenges but a 121-year-old company we are talking about here.
So, without further delay, let’s get to the facts that will help you better understand and determine whether JCPenney is going out of business or has a bright future.
About JCPenney
JCPenney is one of the oldest and largest departmental chains in America. It was founded by James Cash Penny and William Henry McManus in 1902.
From a single store in Wyoming, JCPenney has emerged into a store chain operating 664 locations across 49 states of the U.S. and Puerto Rico.
The store chain offers a wide range of products and services, such as apparel, footwear, accessories, home furnishings, appliances, and beauty products, such as Revlon.
It became a household name in the 70s and 80s as it took advantage of the surging trend of mall shopping.
The popularity of shopping malls gave the company the opportunity to relocate and develop stores to anchor malls.
What Is The Revenue Stream Of JCPenney?
JCPenney is a store that deals with products. So, the primary source of revenue of JCPenney includes retail products such as apparel and home goods.
The company also earns from service fees from salon, optical, and portrait services. Moreover, credit card operations, promotional partnerships, and licensing agreements are all additional sources of revenue of the company.
| Year | Revenue in mil. USD$ | Net income in mil. USD$ | Total Assets in mil. USD$ | Employees | Stores |
|---|---|---|---|---|---|
| 2008 | 19,860 | 1,111 | 14,309 | 155,000 | 1,067 |
| 2009 | 18,486 | 572 | 12,011 | 147,000 | 1,093 |
| 2010 | 17,556 | 251 | 12,581 | 154,000 | 1,108 |
| 2011 | 17,759 | 389 | 13,068 | 156,000 | 1,106 |
| 2012 | 17,260 | −152 | 11,424 | 159,000 | 1,102 |
| 2013 | 12,985 | −985 | 9,781 | 116,000 | 1,104 |
| 2014 | 11,859 | −1,278 | 11,801 | 117,000 | 1,094 |
| 2015 | 12,257 | −717 | 10,309 | 114,000 | 1,062 |
| 2016 | 12,625 | −513 | 9,442 | 105,000 | 1,021 |
| 2017 | 12,547 | 1 | 9,118 | 106,000 | 1,013 |
| 2018 | 12,505 | −116 | 8,413 | 98,000 | 872 |
Is JCPenney Going Out Of Business 2023?
JCPenney filed for bankruptcy in 2020, which made it shut down most of its locations. The company posted many years of loss.
It had a debt of about $4 billion, which forced the company into bankruptcy. However, JCPenney has now emerged as a more strong company with new strategies for restructuring. This means that JCPenney is not going out of business.
Furthermore, the CEO of JCPenney, Marc Rosen, said that we’re all aligned, and that is one of our critical success factors, and we all want to grow our business.
Why JCPenney Is Closing?
There are many reasons why JCPenney has closed many of its stores.
1. Mismanagement
The first one is the appointment of the new CEO, Ron Johnson after the company reported a billion-dollar loss after the GFC.
Johnson estranged the company’s largest audience by focusing the company’s strategy on the rich market and redrafted the JCPenney stores without validating his ideas.
He hired a team of outsiders to fill the position of seniors, fired 19,000 employees, and removed the discount pricing strategy of JCPenney.
He also banned the word ‘Sale’ and replaced it with ‘month-long-savings’, which created confusion among the customers.
As a result, the sales of JCPenney fell by 25% under his tenure, further correlating a loss of $4.3 billion in revenue.
2. Pandemic
The second reason which crippled the company was the pandemic. The COVID-19 pandemic impacted the company to the level to which it had to file for bankruptcy and immediate closures of 242 stores.
At the time, JCPenney was one of the retail businesses that were on the bridge of going bankrupt in North America.
Who Are The New Owners Of JCPenny?
After the company filed for bankruptcy, Simon Property Group and Brookfield Asset Management purchased JCPenney for $1.75 billion in cash and debt deal worth around $800 million.
Under the new owners, JCPenney shut down nearly 850 of its stores and has less than $500 million in debt.
Which JCPenney Stores Are Closing?
As JCPenney is closing many of its stores, it’s difficult to find which store is still open. We’ve compiled a list of stores that are already closed or will be closed soon:
| States | Address | Status |
|---|---|---|
| Alabama | Covington Mall | CLOSED |
| Enterprise Shopping Center | CLOSED | |
| Regency Square | CLOSED | |
| Jackson Square | CLOSED | |
| Spanish Fort Town Center | CLOSED | |
| Arizona | Little Creek Center | CLOSED |
| Kingman Square Shopping Center | CLOSED | |
| Christown Spectrum | CLOSED | |
| El Con Shopping Center | CLOSED | |
| Colorado | Durango Mall | CLOSED |
| JCPenney | CLOSED | |
| Greeley Mall | CLOSED | |
| River Landing Shopping Center | CLOSED | |
| Illinois | Northfield Square | CLOSED |
| University Mall | CLOSED | |
| Freeport Mall | CLOSED | |
| Cross County Mall | CLOSED | |
| Times Square Mall | CLOSED | |
| Pennsylvania | Clearview Mall | CLOSED |
| Clarion Mall | CLOSED | |
| North Hanover Mall | CLOSED | |
| Galleria @ Pittsburgh Mills | CLOSED | |
| Century III Mall | CLOSED |
So, before visiting any JCPenney store, please do check through this link about the availability of the store in your locality.
((https://companyblog.jcpnewsroom.com/storeclosings/#header-1589833475897))
What Is The Future Of JCPenney?
Despite facing all the challenges, JCPenney has restructured its strategies and is making progress by opening off-mall locations under the JCP Beauty concept.
As a part of remodeling, Marc Rosen, the CEO of JCPenney, said 100 stores have been renovated, and the plan is to remodel from 50 to 100 stores per year.
He also added customers are spending $700 more per month than they were spending two years ago.
Besides remodeling its stores, JCPenney is also making steps towards digital transformation. It has launched new features like virtual try-on tools, loyalty programs, and buy online pick-in-store options.
These changes have helped the company increase the number of repeat visits of existing customers in both physical and online stores, according to Rosen.
He further noted that after about 5 years of decline, JCPenney is now experiencing frequent visits from customers- an increase of 5%. As for its beauty department, 25% of customers are new customers.
In the fiscal year of 2021, JCPenney has reported better results, with net sales increasing by 17% to $8 billion, whereas the net income increased from $2 million to $300 billion.
So, the company is forging a new future with increased sales and new strategies.
Conclusion
After filling for Chapter 11 Bankruptcy, “Is JCPenney going out of business 2023?” was the talk of the town.
JCPenney has grappled with years of internal issues and has also faced an uncertain economy that challenged the healthier department stores in the market.
But despite all these challenges, the company is now back in the market with new strategies that helped it gain new customers and increase the visits of existing ones.
Moreover, the acquisition by Simon Property Group and Brookfield Asset Management has also helped the company to grow to new heights.
JCPenny is “unbelievably profitable,” said the CEO of Simon Property Group, David Simon. He added that they are very pleased with the positioning of the company and with the management team for all they doing to reinvigorate the brand.
FAQs
Is JCPenney going to survive?
After just two years of filing for bankruptcy, the company is now standing strong with new owners, a new strategy, and an increased number of customers visiting.
How many locations of JCPenney has left?
After the closures, JCPenny is currently operating 664 stores in 49 states of the USA.
Who are JCPenney's target customers?
The target customers of the company are typically the people residing in households with a median income between $50,000 and $75,000.