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J.C. Penney at mall one of 154 to close

JCPenney was among the stores that stayed closed when the Arden Fair Mall reopened in Sacramento, Calif., Friday, May 29, 2020. Arden Fair reopened Friday since closing in March due to the coronavirus pandemic. (AP Photo/Rich Pedroncelli)
Company trying to come out of bankruptcy

In addition to the local store at Clearview Mall, the retailer is closing stores in Hanover, Monaca, Monroeville and Tarentum.

“It's unfortunate that they're closing,” said John Brautigam, mall manager at Clearview Mall. “It was one of the original anchors here.”

Brautigam said for many years, J.C. Penney served as a strong, nationally-recognizable company that consistently drew people to its stores and to Clearview Mall.

“They've been a long-standing company, over 100 years old,” he said. “People enjoyed having them here.”

J.C. Penney asked the U.S. Bankruptcy Court on Thursday to allow it to reject 18 percent of its store leases in 38 states. Most of those locations are in malls, and the company said it expects more closings during the bankruptcy reorganization.

Store employees were told Thursday, according to the news release on the company's website.

It will take 10 to 16 weeks to sell out and close the stores.

Jordan Grady, executive director of the Butler County Chamber of Commerce, said the closure of J.C. Penney is a sign that the coronavirus pandemic has even affected big box stores.

“That's obviously the reason why they did this,” Grady said. “Hopefully this isn't a trend that we continue to see.”

Grady said people will at least have options to replace the goods they would buy from J.C. Penney from other businesses around the county.

“We do have some options locally to find some of the clothing and footwear,” he said. “There are plenty of local options to cover that void.”

But Grady also acknowledged that the loss of J.C. Penney leaves a void bigger than that of shoes and clothing. It leaves behind one of the larger spaces in the mall vacant.

“You have to look at what will work there. Maybe another large box retailer could work there,” Grady said. “A paintball park or something recreational could work there. The air bounce place is doing fairly well (in the mall.)”

Brautigam said because the news is still fresh, they have not yet found a replacement for J.C. Penney, but the space is considered a premium location with its own entrance outside the mall. He said they have had some interest, just not from new stores.

“We're in talks with other tenants who are interested in the space,” Brautigam said. “It's a great space for sure.”

J.C. Penney filed for bankruptcy reorganization in May after the coronavirus pandemic temporarily closed all its stores, putting its turnaround efforts in jeopardy. A judge approved J.C. Penney's $900 million financing package Thursday to fund its reorganization. Retail bankruptcies can deteriorate quickly as J.C. Penney's lenders have power to convert the filing into a liquidation.

“While closing stores is always an extremely difficult decision, our store optimization strategy is vital to ensuring we emerge from both Chapter 11 and the COVID-19 pandemic as a stronger retailer with greater financial flexibility to allow us to continue serving our loyal customers for decades to come,” said Jill Soltau, chief executive officer of J.C. Penney.

Soltau hasn't made many statements since the pandemic and since filing for bankruptcy on May 15. She will be convincing lenders to allow the company to reorganize and come out of bankruptcy still operating as a department store retailer, but with fewer stores and less debt. She thanked employees and said those who are losing jobs “will be treated with the utmost consideration and respect,” but declined to quantify the staff cuts.

“We will remain one of the nation's largest apparel and home retailers as we continue to operate a majority of our stores and our flagship store, jcp.com, to ensure our valued customers continue to have access to the products and brands they need and want,” she said in a statement.

J.C. Penney has 500 stores reopened as of Thursday. The retail giant was among the group of nonessential retailers that temporarily closed their stores in mid-March and started reopening in early May as stay-at-home orders were lifted. A few more stores are closed because of protests.

It started the week with 304 stores of its 846 stores open and added 171 more. Penney's bankruptcy lawyer Joshua Sussberg said during a hearing Thursday that e-commerce sales have been strong, up 23.5 percent last week and up 15.7 percent in May.

Overall sales are down 32.9 percent for the stores that have so far reopened from the pandemic.

Among the group of stores open, 202 are in malls and 102 are in off-mall locations. The off-mall stores open so far are performing slightly better with sales down only 31.1 percent versus a decline of 34 percent for the mall stores, Sussberg said.

James Cash Penney opened his first store in Kemmerer, Wyo., in 1902, and he proceeded to open stores in smaller farming and ranching towns and later in more urban downtowns.

Finally, the expansion into suburban malls in the 1970s and 1980s, made Penney a coast-to-coast national department store chain.

Eagle staff writer Nathan Bottiger contributed to this story.

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