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JCPenney plans to shut Newark store amid retail brick-and-mortar apocalypse

NEWARK — JCPenney intends to shut one of its East Bay outlets, a Newark department store that’s a NewPark Mall anchor, according to official state government documents.
The looming shutdown of the JCPenney store in Newark marks a fresh Bay Area wound that’s been opened by what some analysts dub a “retail apocalypse” for the brick-and-mortar operations of an array of merchants.
“JCPenney Corp. will close its store located at 500 NewPark Mall, Newark,” the retailer wrote in an official notice delivered this month to the state’s Employment Development Department. “The closing will be permanent.”
About 60 jobs will be eliminated as a result of the closure of the JCPenney store in Newark, the EDD filing showed.
“The closing will cause the permanent separation of (JCPenney) associates on or around May 3, 2019,” according to a letter prepared by Ray Clark, a senior managing counsel for JCPenney. Some employees might remain until May 17, according to a letter sent by the company to the Newark employees.
The layoffs affect all of the retailer’s workers at the Newark store.
“Based on business needs and associates’ interests, it is anticipated that a few associates may be offered employment in other JCPenney locations,” the retailer stated in the notice to the EDD and local officials.
Employees who shift to remaining JCPenney locations won’t be able to displace other employees of the merchant from their current jobs, the retailer said.
“There are no other positions to which JCPenney associates at the Newark store have ‘bumping rights,’ which means that associates have no contractual rights to assume positions that are already filled by other associates,” Kerri Manino, general manager of the JCPenney store, wrote in a letter to employees.
The 60 JCPenney employees being laid off in Newark include 21 cashiers, 12 temporary associates, 11 operations associates, and several supervisors, including a general manager, the retailer’s WARN notice disclosed.
The retailer operates 10 Bay Area stores, according to the company’s website on Tuesday. JCPenney’s existing stores in the nine-county region are in Antioch, Concord, Daly City, Fairfield, Hayward, Newark, Pleasanton, San Bruno, San Jose and Santa Rosa.
On Feb. 28, JCPenney warned that it would close 18 full-line stores and nine specialty home and furniture stores, although the retailer at that time didn’t provide specific locations. JCPenney also didn’t provide reasons for the Newark shutdown that were specific to that store.
However, in a conference call with analysts on Feb. 28, JCPenney senior vice president finance Trent Kruse did give some general parameters for stores that would cease operations this year.
“The stores identified for closure either require significant capital or are minimally cash flow positive,” Kruse told the analysts. “Comparable sales performance for the closing stores was significantly below the remaining store base and these stores operate at a much higher expense rate given the lack of productivity.”
JCPenney intends to give the affected employees outplacement assistance.
“Thank you for the time you have dedicated to JCPenney,” Manino wrote in the letter.
JCPenney is among dozens of retailers with active plans to shut brick-and-mortar stores during 2019. Macy’s, Target, Kohl’s, Sears, Kmart, Lowe’s, Payless ShoeSource, Victoria’s Secret, J. Crew, Gymboree, Charlotte Russe, Gap, Starbucks, The Children’s Place, Family Dollar, Shopko, Chico’s, Things Remembered, Performance Bicycle, Destination Maternity, Christopher & Banks, Beauty Brands, Henri Bendel, Winn-Dixie and Lord & Taylor are closing stores in 2019.
Competition from online retailers such as Amazon — as well as the digital marketplaces operated by the retailers themselves — have chewed up the dominant market share that physical-location stores once boasted.
“E-commerce continues its relentless share gains in retail, and market forecasts call for this rate to accelerate,” Coresight Research stated in a February report. “Retailers in the U.S. continue to open stores at a rapid pace despite flattish store-based retail sales.”
 

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