I thought these observations gleaned from recent news stories, were worth sharing. They arrived in emails from someone who comments as “Compare Decide”.
The good news is that JC Penney has made its first profit since 2010.
The bad news is that they have decided to close up to 140 stores.
The worse news is that this will probably trigger the closing of many struggling shopping malls.
Most of these articles on this subject frame it in terms of the rise of online shopping, or the executive mistakes of the past.
But it has been little noted that these store closings are in rural areas.
The story of the century is the decline, obsolescence and doom of small towns and outside suburbs, and so few seem to see this pattern.
But back in September of 2016, an optimistic JC Penney was planning on replacing Sears and Macy’s.
Some of J.C. Penney’s most profitable locations turned out to be small stores in rural areas where the retailer pays almost no rent; two California stores opening this year will be completely funded by the landlord.
A less happy story from yesterday.
Penney on Friday eked out its first annual profit since 2010, but executives said they were closing weaker stores so they could focus their investments on revamping those in stronger markets. Penney said it would identify the locations that are set to close next month, though executives said many were smaller stores in rural locations.
Geography is critical.
Optimism is still evident in some parts of the retail industry.
But another mall giant, Gap Inc., posted higher comparable quarterly sales for the first time in two years. “If you read the headlines today, you’ll see the words dead, dying, sick. We are none of those,” CEO Art Peck told investors late Thursday. “We are healthy and strong and have a plan and clear direction.”
Um, that’s what JC Penney was saying last year….