Legacy retailer JCPenney has announced that it won’t sell major appliances after Feb. 28, “in order to better meet customer expectations, improve financial performance and drive profitable growth,” the company said in a blog post.
The company also said that furniture will only be available online and in some stores in Puerto Rico.
“While configurations vary by store, we are finalizing new layout options, including the reduction of store space previously dedicated to appliance and furniture showrooms, to maximize efficiencies, reduce inventory and create an enhanced shopping experience that inspires repeat shopping trips,” the company said. “Optimizing the allocation of store space will enable us to prioritize and focus on the company’s legacy strengths in apparel and soft home furnishings, which represent higher margin opportunities.”
The move marks the first major action by new CEO Jill Soltau, according to a CNBC report. Former CEO Marvin Ellison, who is now CEO of Lowe’s, brought back appliances after the company primarily focused on apparel and other softer goods. Ellison saw an opportunity after watching Sears increasingly lose market share and stores. Even though Sears’ future is increasingly uncertain, JCPenney is struggling, too, with too much inventory and possibly – with 800 locations across the U.S. – too much real estate.
Shares in the company fell 2 percent on the news, routing the stock to about $1.30. In December, the shares fell under $1 for the first time ever.
“Customers can purchase major appliances in stores and online through Feb. 28 and receive free basic delivery and installation on new model purchases over $299,” the company said. “All protection plans and manufacturer’s warranty agreements will remain in effect for the applicable warranty period,” the company said. “Further information related to this decision will be available on Feb. 28 when the company reports its fourth quarter and fiscal 2018 results.”
Analysts expect more store closures from the company in the future.
Date: February 14, 2019