---- — OTTUMWA — Local J.C. Penney shoppers can breathe a sigh of relief. Ottumwa is not among the 33 targeted stores the retail department store plans to close.
J.C. Penney Company is planning to close 33 underperforming stores and trim 2,000 positions, moves the department store retailer said are necessary so it can focus on locations that generate the strongest profits. The only store in Iowa that will close is in Muscatine at the Muscatine Mall.
Penney on Wednesday said the move to close 33 stores from its base of about 1,100 locations will result in annual savings of about $65 million beginning this year. The closings will result in the elimination of about 2,000 positions, and eligible associates who don't remain with the company will receive separation benefits packages.
The company expects to incur pretax charges of about $26 million in the fiscal fourth quarter and an additional $17 million in future periods due to the store closures.
"As we continue to progress toward long-term profitable growth, it is necessary to re-examine the financial performance of our store portfolio and adjust our national footprint accordingly," said Chief Executive Mike Ullman III.
A Penney spokeswoman said the decision followed an analysis of store performance at the close of the year, adding that such reviews are commonly done by retailers around this time.
Penney said remaining inventory at the affected stores will be sold "over the next several months," with final closings to be complete by early May. The store closures don't affect a plan by the company to open a new store later this year in Brooklyn, N.Y.