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Ailing J.C.
Penney to close
50 department stores

Hawaii stores won't be
affected, the company says

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From staff and wire reports

PLANO, Texas -- J.C. Penney Co. plans to close about 50 department stores as new management tries to repair the troubled retailer, officials said today.

The Plano-based retailer said it will announce the closings and release a list of affected stores later this week.

The company said today it was not closing any of the four remaining Penney stores in Hawaii -- in the Ala Moana Center, Pearlridge Center, Hilo and the Kahului -- will close. In an earlier cost-cutting move, the company closed its Windward Mall store in 1998.

The first Hawaii store, the three-level Ala Moana outlet, opened in 1966.

Penney has seen its national market share slip for several years as it was outflanked by discounters and trendier retailers. Analysts say the company was slow to update its stores and suffered from poor marketing and stale merchandise.

The company began telling employees about the closings late last week, and workers at some additional stores are still being notified, officials said.

Spokesman Tim Lyons said the stores targeted for closing were identified during an ongoing review of sales performance. He said disappointing holiday season results -- same-store sales fell 1.6 percent from December 1999 -- were not a factor in the closings.

"These were underperforming stores," Lyons said. "It's tough for the stores that are being closed, but it was something we felt we had to do to begin to turn the business around."

The timing of the store closings will vary because of lease considerations, but many will shut their doors this spring, he said.

The company also is shuttering an undisclosed number of Eckerd drugstores, a spokesman said.

The company has not disclosed how many employees will lose their jobs. Lyons said some employees will be offered jobs at nearby Penney stores but most will be offered severance benefits.

Penney has about 1,100 Penney stores, 2,600 Eckerds and 290,000 employees. It had 1999 sales of $32.5 billion.

This is the second major round of store closings for Penney in as many years. Last year, the company announced it would close 45 department stores and 279 Eckerds, which resulted in about 1,875 layoffs.

Penney Chairman and Chief Executive Allen Questrom said the company would go through a two-year transition to improve sales and profits.