In an effort to spur long-term growth, J.C. Penney (NYSE:JCP) unveiled its plan on Monday to close six unprofitable stores this year and exit the catalog business.
The move follows an extensive review by the companyā€™s executive board and board of directors to locate areas of profitability and opportunities for sales growth.
"The actions we are announcing today are significant steps in an ongoing process to ensure we are best managing costs and allocating our resources effectively to the strategies that will allow us to improve margins and drive profitable sales over the long term,ā€¯ J.C. Penney CEO Mike Ullman said in a statement.
The retailer will shutdown five of its flagship JCPenney department stores in various regions across the country and one JCPenney Home Store in Duluth, Ga. It will also close all 19 of its catalog outlets, which had carried a significant amount of catalog merchandise.
The Plano, Texas-based company will also streamline its call center operations and custom decorating business, including the closure of two call center facilities and one customer decorating facility.
J. C. Penney will also slash the number of individual, in-store custom decorating studios it manages, down to 300 in key markets from 525.
The company will take a $30 million charge in the fourth-quarter of fiscal 2010 and $20 million in 2011 to fund the deal.
Also Monday, J.C. Penney added two new directors to its board, Bill Ackman, who is the chief executive of Pershing Square Capital Management, and Steven Roth, chair of Vornado Realty Trust. The move expands the board to 13 members from 11.