MOODY'S: JCPenney could close dozens more stores
- JCPenney is expected to close more stores, according to Moody's analysts.
- The company will likely target locations in the approximately 100 shopping malls that have multiple anchor vacancies, analysts wrote.
- JCPenney said in February that it planned to close 18 full-line department stores and nine home and furniture stores this year, bringing its total locations to roughly 840.
JCPenney will likely close more stores in addition to the 27 it identified for closure earlier this year, according to Moody's analysts.
"We anticipate JCPenney will continue to rationalize its store base as it works to improve store productivity," Moody's vice president Christina Boni said in a recent note to clients. "Even after announced store closings, the company will have a larger footprint than many of its competitors, while sales per square foot are well below those of peers."
JCPenney said in February that it planned to close 18 full-line department stores and nine home and furniture stores this year, bringing its total locations to roughly 840.
Read more: JCPenney is closing 27 stores - see if your local store is on the list
Going forward, the company will likely target store closures in the approximately 100 malls that already have multiple anchor vacancies, analysts wrote.
Anchor stores are the large, multi-story buildings at mall entrances that are often occupied by department stores. When one or more anchor stores close at a mall, it can often trigger a downward spiral in performance.
JCPenney has about 100 stores in malls with two or more anchor vacancies, and 300 stores in malls with one anchor vacancy, according to the Moody's report.
But closing another 100 stores won't solve all JCPenney's problems. The company also needs to improve the productivity of its remaining stores, according to the Moody's report.
JCPenney should consider slashing the size of some stores and looking at "whether some stores would benefit from being partly walled off without inventory," the analysts wrote.
A spokesperson for JCPenney did not respond to Business Insider's request for comment on the Moody's report.
JCPenney has already committed to exploring new layout options, including the reduction of store space.
"While configurations will vary by store, we are finalizing new layout options, including the possible reduction of store space previously dedicated to appliance and furniture showrooms," Trent Kruse, JCPenney's senior vice president of finance, said on the company's most recent earnings call.
He said these measures aimed to "maximize efficiencies, reduce inventory and create an enhanced experience that inspires repeat shopping trips and customer loyalty."