JCPenney closing its doors at Jasper Mall

By ED HOWELL
Posted 3/18/17

Daily Mountain Eagle

JCPenney, which was first a major presence in downtown Jasper and then became one of the original anchors of the Jasper Mall, will close in Jasper this year.

The announcement of the retail chain was a major hit for the …

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JCPenney closing its doors at Jasper Mall

Posted

Daily Mountain Eagle

JCPenney, which was first a major presence in downtown Jasper and then became one of the original anchors of the Jasper Mall, will close in Jasper this year.

The announcement of the retail chain was a major hit for the local mall, where Kmart is already having a closing sale as one of the three anchors in the mall. Chick-fil-A, another original tenant, announced recently it was closing in the center of the mall. Belk is now left as the only remaining anchor tenant.

Also, in response to emailed questions from the Daily Mountain Eagle, an announcement was also made Friday that a company has been named the receiver for the local mall and will be responsible for leasing and managing it.

Marsha Massey, the general manager of the Jasper Mall, said late Friday afternoon she could confirm JCPenney was closing in the mall.

“They have been a great tenant at the shopping center for many years,” she said, noting it was one of the original tenants when the mall opened in 1981, moving from its downtown Jasper location.

The closing was somewhat expected as the Plano, Texas-based company announced a few weeks ago the struggling retail giant would close up to 140 stores nationwide. The list released by the corporation Friday included 138 stores, including four in Alabama. Besides Jasper, the state list included the Auburn Mall, the Gadsden Mall and the Tannehill Promenade in Bessemer.

Liquidation to start next month

A news release on Friday said most of the closings will occur in June and most of the affected stores will begin the liquidation process on April 17.

The news means more than 300 big-box stores will be closed this year, according the CNBC, noting problems with Sears and Macy’s. Competition from Amazon and other online retailers and the struggles of malls to stay relevant have been a continuing problem across the nation.

The company said in a release Friday that the closings came “as part of a continuing effort to advance sustainable growth and long-term profitability.” It said it would also close one supply chain facility in Lakeland, Fla., and relocate one supply chain facility in Buena Park, Calif., “to align the company’s physical store footprint and omnichannel network.”

A Feb. 24 statement said the company was seeing success last year with a renewed emphasis on beauty, home refresh and special sizes and wanted to concentrate improving their remaining stores.

About 5,000 positions are affected nationwide, according to the announcement on Friday. No number of employees was available for the Jasper store. A sales clerk at the Jasper store said Friday the local manager, Sonya Knight, was not in the store that day and referred questions to her.

The Associated Press said the company had 105,000 full-time and part-time employees last year. It also noted the closings will leave the chain with about 900 stores.

“JCPenney is in the process of identifying relocation opportunities within the company for esteemed leaders. Additionally, JCPenney will provide outplacement support services for those eligible associates who will be leaving the company,” the release said.

Linda Lewis, the president of the Chamber of Commerce of Walker County, released a statement on Friday afternoon about the closings at the mall.

“The historic model for retail development has changed in recent years due in large part to online shopping trends,” she said. “The corporate decision to close existing stores by retailers like Kmart and JCPenney affects locations nationwide, and it is not necessarily an indication of a poor retail climate in Walker County. Recent retail developments in Walker County are thriving and many new opportunities are looking at our area for future growth.”

O’Mary confident of retail growth

Jasper Mayor David O’Mary said Friday he only learned of the closing when a Birmingham television station called him for comment.

“That is a situation you prefer not to have happen but JCPenney, we know they have been challenged companywide for some time,” O’Mary said. “Apparently, Jasper was an underperforming store. When we lose jobs, we lose sales tax revenue.”

O’Mary, a retired banker, said he was not sure if the use of malls to house retail establishments is going away.

“I am beginning to scratch my head over that, because we have had such good success the past couple of years with strip center retail establishments that stand alone, where you go to Hobby Lobby, Petco, T.J. Maxx. That has done well,” he said. “You go east and find Aldi’s as a stand alone. You find Harbor Freight that is a stand alone. We had a meeting with a group today that if we are successful, that will be a stand alone.”

He said he could not identify the group that was meeting with him that day, although he said those developers had done their research and are optimistic about coming to this market.

“While we hate to lose those entities, we have growth in other areas and I’m optimistic that there are more on the way,” he said. “I don’t see any major dips in our economy. Quite honestly, I am optimistic as we move along, there has been a considerable amount of hiring in mining companies that is going to help us.” 

He said while he is disappointed about the JCPenney decision, “I am certainly not discouraged about the prospects for having good retail and industrial growth.” 

Massey said she looks at the closing as “an opportunity to enhance the retail offerings at our center to better meet the needs of our customers.” She also encouraged people to shop locally in Jasper and support its merchants.

Shoppers reflect on store’s closing

Shoppers outside the JC Penney entrance at the Jasper Mall reflected on the loss of the retail chain in Jasper.

“I feel that if they had upgraded this store and had more clothes that were more appealing, and had the prices been a little bit lower, I think it would have opened and the business would have really would have boomed,” said Alicia Jackson of Oakman. “It really would have been good business, because it was before. But a lot of things changed and people don’t shop in Penney’s like they used to.” 

“I wish it wouldn’t close. I like their clothes and wish it would stay open,” said Pat Patton of Jasper, who was coming out of the store with his family. “We were just talking about that. Kmart gone. Penney’s gone.” 

“I’ve been shopping here a long time,” said Patton’s wife, Judy, remembering that Penney’s was in downtown Jasper going back as far as the 1940s before the store moved to the mall when it opened in 1981.“I got a job when I was 16 and that was my first charge account, downtown,” she said.

In a statement on Feb. 24 to announce that stores would be closed, Marvin R. Ellison, chairman and chief executive officer of JCPenney, said, “We understand that closing stores will impact the lives of many hard working associates, which is why we have decided to initiate a voluntary early retirement program for approximately 6,000 eligible associates. By coordinating the timing of these two events, we can expect to see a net increase in hiring as the number of full-time associates expected to take advantage of the early retirement incentive will far exceed the number of full-time positions affected by the store closures.

“We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat of online retailers. Maintaining a large store base gives us a competitive advantage in the evolving retail landscape since our physical stores are a destination for personalized beauty offerings, a broad array of special sizes, affordable private brands and quality home goods and services,” said Ellison.

Ellison said the company was experiencing double digit growth in its website and that the use of its brick and mortar stores would help offset delivery costs. He said having a smooth interaction between online sales and its physical stores will determine the future winners in retail competition, by cutting the cost of delivery.

“In fact, in 2016 approximately 75 percent of all online orders touched a physical store. Even with a reduced store count, JCPenney is competitively positioned to deliver a differentiated department store model that meets the expectations of a digital world with an inspiring, tangible shopping environment,” Ellison added.

Trading on JCPenney stock was down nearly 3 percent Friday, trading at $5.99 by the close of trading Friday. It traded as high was nearly $11 a share in December, but sank after the start of the year.

Receiver named for Jasper Mall

In a related matter, Jones Lang LaSalle Americas Inc. (JLL) announced in an email that it has been appointed as receiver of Jasper Mall. Massey referred questions about the move to Daymon Ward, the general manager, who responded by email to questions from the Daily Mountain Eagle late Friday afternoon.

Ward wrote, “As the receiver, JLL is responsible for controlling and maintaining the asset as an officer of the court. JLL will be responsible for leasing and management of the shopping mall. As a receiver, JLL was appointed by the courts to work closely with the lenders and borrower to control and direct the use of the asset until a resolution is achieved. Although receivership designations vary state by state, they share the same premise of appointing independent managers to assume fiduciary responsibility. During the receivership process, the receiver chooses the most appropriate firm to manage and lease the asset and provides recommendations for the most profitable outcome of the asset, including the possible sale of the asset.”