J.C. Penney on Wednesday said it plans to close 33 underperforming stores, including the retailer's location in Muscatine, as part of its turnaround efforts.
The Plano, Texas, company said the closings will cut 2,000 jobs and enable it to focus its resources on the highest growth opportunities. The moves will result in annual cost savings of about $65 million, beginning this year.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said Chief Executive Officer Mike Ullman.
The struggling retailer also is restoring commission pay for employees working in window coverings, furniture and fine jewelry departments. Beginning next month, the retailer will start compensating more than 3,000 staff members for their sales, a practice killed by former Penney CEO Ron Johnson.
Daphne Avila, a Penney spokeswoman, said the company will cut hourly pay for the workers while declining to disclose by how much or what percentage they will receive in commissions.
Penney expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods.
On Jan. 8, Penney reiterated its forecast that same-store sales would improve in the fourth quarter and that it would have more than $2 billion in liquidity at the end of the period. However, the company failed to provide December sales data it had made public the previous three months.Penney also plans to close stores in Alabama, California, Colorado, Connecticut, Florida, Illinois, Indiana, Maryland, Michigan, Minnesota, Mississippi, Montana, North Carolina, New Jersey, Ohio, Pennsylvania, Tennessee, Virginia and Wisconsin.