Alert: JC Penney To Close Stores This Year, Sozzi Says

• Pretty much like Macy's, Inc. M and other struggling retailers, J C Penney Company Inc JCP has decided to shrink its operations this year.
• According to a Brian Sozzi article published on The Street, the small cap department stores operator plans to close seven –of its roughly 1,060- U.S. stores over 2016.

In an effort to improve operational efficiency in the e-commerce era – and amid a process where population is moving from rural communities to urban areas- J C Penney will be closing seven (of the roughly 1,060) stores it operates in the U.S. stores in 2016, Sozzi assured on Tuesday.

People from the company’s management team were at the ICR Conference on Tuesday, and said that the stores picked for closure will be smaller-sized ones, mostly located in older, less-crowded malls. Interestingly, the company only owns two of these stores, while the other five are leased, Sozzi added.

A company spokesman, Trent Kruse, told TheStreetthat they would probably “be a net closure of stores the next few years.”

Macy’s also announced recently that it would be closing 35 stores by early spring 2016. But, why did it move faster than J C Penney?

“Macy's had a head start in understanding the impact of how digital shopping influences its bricks and mortar stores, we are really now just better understanding the influence,” Kruse explicated.

Shares of J C Penney were trading down roughly 1.5 percent on Tuesday afternoon, while shares of Macy’s lost almost 2 percent during the day.

Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.