Hit hard by weak demand for clothing and fierce competition from online retailers, the department store chain is following Macy's footsteps in shutting down stores. Fred Katayama reports.
Big cost cutting at J.C. Penney. The department store chain will close up to 140 stores over the next few months. Those stores account for less than 5 percent of annual sales but account for about 14 percent of its store base. Hit hard by weak demand for clothing and fierce competition from online retailers, Penney is following Macy's footsteps in shutting down stores. It's also closing a distribution center in Florida and selling a supply chain facility in California. Penney expects to save about $200 million from the measures and take a $250 million charge. In the latest quarter, the retailer posted its first annual profit in five years, but heavy promotions involving coupons cut into its margins. And sales at existing stores fell more than analysts had expected. Penney shares, down 21 percent this year, dropped further in early trading.