8 Reasons JCPenney Is Closing Many of Its Stores

4 min read
Jcpenney Store

Why is JCPenney closing so many of its brick-and-mortar stores? Is it a previously planned shift toward e-commerce? Perhaps the effects of the current global pandemic? Another retail giant that is being forced to declare bankruptcy because of overwhelming debt?

The answer is all of the above and more. The beloved and hugely popular retail company, which recently celebrated its 118th birthday, has been losing money over the last few years. Still, the COVID-19 crisis was certainly the last straw.

By the end of 2021, a total of 242 stores, which is 29% of JCPenney´s 846 storefront establishments, will be closed, taking with them the time-honored tradition of in-person shopping, along with hundreds of jobs.

Let´s explore the eight main reasons behind these unfortunate circumstances.

8. Decline of In-Person Shopping

In Person Shopping

Many U.S. based retail companies have suffered financially over the last decade or so due to the incline of online shopping. JCPenney is not the only retail store to be facing hard times and to have been facing them for a while now.

Different brands and companies have been trying various tactics to counteract the downward trends of in-person shopping, including home delivery and online shopping. Similar to JCPenney, many have been faced with the need to close some of their physical stores to stay in business.

7. JCPenney´s Recent Financial History

Jcpenney Financial History

Since 2011, JCPenney has closed more than 20% of its physical storefront shops and has cut staff by 40%, all to stay afloat.

Despite these drastic measures, or perhaps because of them, it financially stayed ahead of other similar companies, such as Macy´s, Dillard´s and Nordstrom.

However, in 2019, it posted a 5.5% decline in sales, and even though things seemed to be looking up, in the first few weeks of 2020, the global pandemic hit hard and swallowed up any forward movement the retail giant might have hoped was coming.

6. The Global Pandemic

Jcpenney Shopping

The current COVID-19 pandemic has been the impetus in accelerating an already downward turn for most retail stores and businesses of all kinds, and JCPenney is no exception.

Many parts of the U.S. remained on partial lockdown during the spring and summer months of 2020. In-person shopping was slowly starting to open back up, but with limitations. Brick-and-mortar stores across the country faced mounting debt as they tried to continue to pay their employees on a minimal or non-existent sales budget.

5. A Planned Shift Towards E-Commerce

Jcpenney Online

Similar to other retail stores, JCPenney had already started the process of moving more of its business online to try to keep up with other retail entities, many of which had already started to make the switch.

The closing of some stores may have been inevitable, even without a global health crisis, as more of JCPenney´s sales became virtual. Fewer customers were showing up at their physical storefronts. However, this planned movement toward e-commerce cannot account for the totality of store closures.

4. Bankruptcy

Bussiness Bankruptcy

While JCPenney is not the only retail store to declare bankruptcy during the pandemic (others include J. Crew and Neiman Marcus), it is one of the largest companies in the U.S. to file during this difficult time.

JCPenney has been quick to remind the public that this does not mean the company is disappearing altogether, but declaring bankruptcy does, of course, have repercussions. In this particular case, one of these has been the inevitable shutdown of so many physical storefronts.

3. Lay-Offs


While it may be difficult to determine if the closing of physical storefronts has resulted in lay-offs or if pandemic-era lay-offs have, in fact, caused the closing of so many JCPenney stores, the company has publicly announced that it will eventually need to lay off approximately 1,000 of its workers, nationwide, to stay afloat.

This is even more tragic than the disappearance of its stores; potential customers will still have the option of shopping online, but employees will undoubtedly face not only the loss of income during this global health crisis but also the difficulty inherent in trying to find a new job during the current economic recession.

2. Real Estate

Jcpenny Retail

JCPenney plans to reinvent itself by splitting into two entities: an operating business, a greater focus on virtual shopping and home delivery, and a real estate investment trust. This will be an entirely new venture for JCPenney, and it is unclear whether or not it will be a successful one.

1. Retail Footprint


Finally, JCPenney´s official blog attributes the closing of many of its stores to the result of a “comprehensive review of our retail footprint.” This statement does not add much information to the conversation regarding the reasons for the shut-downs. Still, it does indicate that the company took into account many factors before eventually coming to this difficult decision.

So, if you are a valued customer of JCPenney, make sure to check out which stores will be closing to avoid the unpleasant surprise of finding your local store has disappeared. Try to see if the online options, which are sure to be enhanced and upgraded as the company goes through these difficult times, will work for you.

This is not a new phenomenon in U.S. retail, although it may seem like a tragedy for those that love a particular store. But don’t worry, there is still some hope for JCPenney if it successfully reinvents itself.