If you spend a lot of time worrying about paying your own bills, you probably don’t devote a lot of mental space to the struggles of retailers where you often shop. But many of them are in big trouble.
The aptly named “retail apocalypse” has been brewing for many years. But things came to a head in 2020 when stay-at-home orders forced consumers out of stores.
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At that point, shopping had to be done online. And retailers that weren’t well equipped for that model lost out on a lot of business.
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The pandemic also did a number on shopping malls and the retailers that called them home.
Suddenly, consumers didn’t love the idea of being trapped inside a giant indoor structure with dozens of stores and thousands of people to come into contact with.
A lot of people stayed away from malls even once life began to normalize. And a lot of mall retailers haven’t managed to recover since.
Iconic mall retailer closing more stores this month.
Image source: Shutterstock
JCPenney took a hard hit
The pandemic wasn’t kind to mall retailers in general. But JCPenney had an exceptionally difficult time recovering from the events of early 2020.
In May of that year, the mall mainstay filed for Chapter 11 bankruptcy, citing not just forced store closures but a steady decline in sales. And had JCPenney not been bought out of bankruptcy by mall REIT giants Simon Property Group and Brookfield in late 2020, it’s hard to say whether the chain would’ve survived beyond December.
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Unfortunately, things haven’t gotten much better for JCPenney since 2020.
Part of the problem is perception. JCPenney doesn’t have the reputation of being a hip, modern retailer like some of its main competitors.
Plus, JCPenney’s mall presence may be hurting more than helping.
The problem with relying on mall placement is that there’s loads of competition under the same roof. And at a time when consumers don’t have as much money to spend due to lingering inflation, it’s even harder to attract shoppers.
JCPenney store closures continue
There was a point in time when JCPenney operated more than 2,000 stores. But as of early May, its footprint had been whittled down to just over 600.
And now, JCPenney has plans to close seven additional stores by the end of the month.
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The following locations are slated to go out of business on May 25:
The Shops at Tanforan in San Bruno, CaliforniaThe Shops At Northfield in Denver, ColoradoPine Ridge Mall in Pocatello, IdahoWest Ridge Mall in Topeka, KansasFox Run Mall in Newington, New HampshireAsheville Mall in Asheville, North CarolinaCharleston Town Center in Charleston, West Virginia
Unfortunately, if things don’t pick up for JCPenney soon, more closures could ensue.
JCPenney has been desperately trying to reinvent itself since the pandemic. But it’s struggling to carve out a niche at a time when department stores aren’t drawing in customers the way they once did.
The company did join forces with other names in the retail space to form Catalyst Brands. And the goal there is to strengthen its position in retail by being more strategic with branding, product sourcing, and technology.
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But JCPenney has some pretty big hurdles to jump to win customers back. And if the mall giant’s strategies don’t work, this recent batch of store closures could be the beginning of the end.
