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RAPAPORT... In its latest effort to reduce costs and improve earnings, J. C. Penney Company Inc. will close 33 underperforming stores in the U.S. to focus operating resources on its highest potential growth opportunities. JCPenney anticipates that the store closings will reduce annual costs by approximately $65 million, beginning in 2014. In connection with this initiative, JCPenney expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods. Inventory in those affected stores will be sold during the next several months, with final closings expected to be complete by early May. The closings will result in the elimination of approximately 2,000 positions. Eligible associates who do not remain with the company will receive severance packages. JCPenney reiterated its plans to open a new store at the Gateway II development in Brooklyn, New York, later this year. "As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said Myron E. Ullman, III, the CEO of JCPenney. "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."
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