Why many major retailers are closing

The retail giant will soon be closing 140 stores.

Another major retailer is closing up shop.

Trouble getting customers through the doors means JC Penney will shut down 140 stores. The CEO says a list of locations will come out next month. Company leaders say they plan to focus on balancing Penney's brick and mortar presence with online strategies.

Right now, JC Penney operates about a thousand stores, mostly in malls. About one-third of all online orders are shipped from or picked up in stores.

With the closures and volunteer retirement program, Penney's expects to save about $200 million in annual costs.

In the early 1900s many department stores like Macys, JC Penney and Sears were so popular that companies had to open more brick and mortar stores to meet demand.

Now, with online shopping dominating, that large number of stores is no longer needed because most people are going to their websites.

Jennifer Burton, an assistant professor of Marketing at the University of Tampa, explains that companies need to find the perfect balance between having a great in-store experience and accommodating those who shop online.

“Over the last three to five years, you see many major retailers closing stores in order to find that balance of the appropriate number of stores to meet customer demand but also to cut cost and allow them to compete with online retailers like Amazon,” said Burton.

Shopper Aleida Lavin agrees - for certain items she shops in person.

“That's the good thing about the store; you can try everything: the perfume, the clothes, the shoes,” she said.

Friday afternoon, Aleida spent some time shopping at the Macy’s at University Mall in Tampa but says sometimes you can't beat shopping online, for "hings like rings, bracelets that are going to fit no matter what."

It might be inconvenient to see some department stores close in your neighborhood, but Burton predicts that while online shopping is in demand, it will never get to the point where all brick and mortar stores will close.

“Online doesn't always offer the immediate delivery, the immediate gratification that consumers are looking for."

JC Penney says it will be closing anywhere from 130 to 140 stores as well as two distribution centers over the next several months as it aims to improve profitability in the era of online shopping.

One of the distribution centers closing is in Lakeland. That facility will be shut down in June.

JC Penney is just one of about a dozen retailers that have announced closures in the last year:

  • Walmart shuttered about 150 stores.
  • Sports Authority closed all 450 of its stores after filing for bankruptcy.
  • 50 Staples locations are no longer in business.
  • Clothing retailer Aeropostale closed more than 100 stores, including six in Florida.
  • Women's fashion retailer The Limited shut down all 750 locations, including three in the Bay area.
  • Sears and K-Mart are in the process of closing 150 stores; about a dozen are in Florida.
  • Macy's is closing 100 stores including locations in Sarasota, Tampa and Lakeland.
  • Payless Shoes is closing up shop at a thousand stores this year.

© 2017 WTSP-TV


JOIN THE CONVERSATION

To find out more about Facebook commenting please read the
Conversation Guidelines and FAQs

Leave a Comment