Retailer J.C. Penney Company Inc. said today that it would close 138 stores nationwide, including at two malls in West Michigan.
The closures come as for the department store chain attempts to deliver better profitability to shareholders. In total, JC Penney will close seven Michigan-based stores likely in June as part of the plan, including at the West Shore Mall in Holland and Lakeview Square Mall in Battle Creek, according to a statement from the company.
The company is pulling out of Holland as the owners of West Shore Mall continue to implement a “demalling” process, wherein the structures are deconstructed into an inline fashion meant to maximize leasable space.
Leasing agent Mark Ansara told MiBiz he was surprised the approximately 50,000-square-foot Holland location was included on the list. However, the closure could have a silver lining, he said.
“I don’t think it affects us negatively,” said Ansara, who focuses on the retail market for the Grand Rapids office of Colliers International Inc.
Ansara has already received phone calls today about the space from interested users. He expects the space will need to be split into at least two suites.
“This presents us some opportunities,” he said. “I hate to see anyone close, but it gives us some options for other retailers.”
Ansara said he hopes to act quickly to identify a tenant for the space being vacated by JC Penney. However, it’s less clear how the closing will affect Lakeview Square Mall in Battle Creek.
“Retailing is a dynamic and evolutionary industry,” according to a spokesperson for Lakeview Square Mall and mall owner GK Development Inc. of Barrington, Ill. “National retailers are responding to shifting consumer patterns by modifying their marketing strategies, including store closings. Store changes are consistent with retail life cycles and offers GK Development the opportunity to refresh the mall with new and different retailers.”
JC Penney plans to vacate stores in Escanaba, Houghton, Kingsford, Midland and Sault Ste. Marie.
The company first outlined its store-closure plans in late February, saying it could only continue on a growth trajectory by shedding the locations.
About 5,000 people will be affected by the store closings.
“In 2016, we achieved our $1 billion EBITDA target and delivered a net profit for the first time since 2010; however, we believe we must take aggressive action to better align our retail operations for sustainable growth,” Chairman and CEO Marvin Ellison said in a statement. “[O]ur decision to close stores will allow us to raise the overall brand standard of the Company and allocate capital more efficiently.”