JC Penney, Foot Locker, Victoria’s Secret announce massive store closings but Visalia Mall locations will probably survive
By Reggie Ellis @Reggie_SGN
VISALIA – The Visalia Mall got some seemingly terrible news last week as national retailers continued to announce massive store closings across the country. But Visalia Mall general manager Rick Feder remained unfazed by the possibility of losing anchor store JC Penney as well as longtime retail foothold FootLocker and revenue enticing Victoria’s Secret.
“This is part of a retail cycle where companies get rid of the weak to make room for the strong,” he said.
Visalia locations are rarely part of restructuring cutbacks, Feder explained, because they are routinely among the highest performing stores in California. Kmart and Sears locations in Visalia avoided the list of store closings until the company announced it was giving up on the Kmart brand completely.
“We are nicely situated between other regional shopping malls in the area,” Feder said.
Feb. 28 was a sobering reminder that nothing lasts forever as JC Penney, Victoria’s Secret, Foot Locker, and Gap all announced store closings.
JC Penney announced it would close 18 of its department stores as well as nine home and furniture stores in the second quarter of 2019. The company reported its net sales were down 7.1% compared to 2017 causing a $255 million loss on the year. While a list of stores was not provided, JC Penney did say, “The stores identified for closure either require significant capital, are minimally cash flow positive today relative to the company’s overall consolidated average or represent a real estate monetization opportunity. 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.”
Foot Locker announced it had turned the corner in its restructuring plan boasting a 9.7% increase in fourth quarter sales and a 2.8% year-end increase over 2017. On a conference call later that same day, the athletic shoe retailer announced it would close another 156 stores in 2019 after closing 56 stores last year. The list of stores was not available as of press time.
L Brands, the parent company for Victoria’s Secret and Bath and Body Works, announced in a post-earnings conference call on Feb. 28 that it will be closing 53 Victoria’s Secret stores this year despite sales increasing 3% over 2017. The closings make up about 4.5 percent of the company’s 1,170 stores worldwide.
On the same day, Gap, Inc. announced plans to separate its Old Navy brand, which is outperforming all of its other brands, into a separate company. The company’s remaining brands—Gap, Banana Republic, Intermix, Athleta and Hill City—will be part of a new company dubbed “NewCo.”
The announcement was made at the same time Gap reported its fourth quarter financials where Gap disclosed it would be closing 230 Gap stores over the next two years. Overall Gap, Inc. sales were down 1% compared with a 5% increase last year. Gap stores performed the worst with sales falling 5%, followed by Banana Republic, which saw sales fall 3% in the last two years. Old Navy, by contrast, finished the year up 3% and 9% in the last two years.
Gap, Inc. may be closing its Gap and Banana Republic stores in the Tulare Outlet Mall but store closing lists were not available as of press time. Neither store has a location in the Visalia Mall.
Last Thursday’s news comes just weeks after announcements that Payless ShoeSource, Things Remembered, Gymboree and its sister company Crazy 8 would be closing all of its stores after the companies declared bankruptcy. Charlotte Russe, which also declared bankruptcy, spared the Visalia Mall location. The women’s clothing store announced it was only closing 94 of its lowest performing 500 stores.
“No matter what closes, there is an opportunity for new, and exciting retailers to move in,” Feder said. “When you have open space, you can make something happen for those looking to enter new markets.”