J.C. Penney to Shut Stores to Cut Costs

J.C. Penney Co. said it plans to shut as many as 50 department stores nationwide to cut costs as new Chairman Allen Questrom tries to revive the ailing chain and recover from the industry’s worst holiday season in at least five years. In California, closures will include Penney’s department stores in Susanville and Eureka as well as a catalog outlet store in the west San Fernando Valley’s Fallbrook Mall. Questrom, an industry veteran who led two chains from bankruptcy, was hired in September to cut costs, boost earnings and revive the company’s shares, which have dropped 84% from a high of $78.75 in June 1998. J.C. Penney is battling larger rival Sears, Roebuck & Co. for customers, as well as newer low-price chains such as Kohl’s Corp. The Plano, Texas-based company has about 1,100 department stores in 50 states and 2,600 Eckerd drugstores in the Southeast, Northeast and Sunbelt states. It employs about 290,000 workers. J.C. Penney shares rose 25 cents to close at $12.50 on the NYSE.