J.C. Penney is closing a Wisconsin distribution center and 8 stores
J.C. Penney said it's closing a large distribution center as the retailer's footprint no longer justifies properties built decades ago. Also, its post-holiday season review of its store fleet has resulted in eight stores closing, none in Texas.
The Plano-based retailer said it will close its Wauwatosa, Wisc., distribution center this summer, eliminating 670 jobs. Eligible employees will receive separation benefits including outplacement services.
About 480 employees are affected by the eight store closings, and the company said it's working to relocate staff to nearby stores if possible.
Penney said it no longer needs the 2 million-square-foot warehouse in Wisconsin that's been part of its supply chain since 1963. The building also houses a customer service center.
The decision is part of an effort, Penney said, "to align our supply chain network and customer care operations with future needs of the company." Last year, Penney sold a similar distribution center in Buena Park, Calif.
By last year's holiday shopping season, all of Penney's 875 stores were filling customers' online orders. Customers are also picking up their online purchases at Penney stores and that too is helping the company "streamline" its supply chain, Penney said.
"The company's supply chain network is oversized relative to its national store footprint," Penney said. Penney will shift the work to two large distribution centers in Lenexa, Kan., and Columbus, Ohio. The distribution center will close on July 1 and the customer service center will close on Sept. 1.
Penney also said it will not reopen its Humacao location, one of its seven stores in Puerto Rico that were shuttered after Hurricane Maria destroyed much of the island last September.
J.C. Penney has been mining its real estate to help fund its turnaround, and it's exploring the potential sales of the Wisconsin property.
A year ago, it sold its Buena Park distribution facility for $131 million and recorded a net gain of $111 million. Through the third quarter last year, Penney received $23 million from its Plano headquarters land joint venture that it entered into in 2014 where it contributed 220 acres of excess land to the Legacy West development.