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JC Penney Struggling: Could Stores Close?
JC Penney is struggling right now. The company has taken a hard blow, recently revealing the loss of $123 million in the last three months. Many are wondering if the company will be forced to close shop, and how a closure might impact what could be the city's newest TIF district.
JC Penney has been struggling for a number of years, and now the company reports its cash on hand is just over half a billion dollars--half of what it was this same time last year.
This new information comes just as a survey on the local economic outlook is released.
Twice a year, the UIS Survey Office teams up with the Chamber of Commerce to check in on local businesses.
“Our spring 2012 survey was really positive," UIS Survey Research Office Director Ashley Kirzinger said. "Business owners saw expected growth in their own firm and their firm sector."
It isn’t all rosy, though, and at least some trouble is brewing.
“Our fall survey saw--sees--a leveling off or a decrease in expectations," Kirzinger said. "Businesses are still really positive about their own business in their own sector but they're less positive about the overall."
One long-struggling business in particular may not survive.
“JC Penney's has been over there for what 40, 50 years, and it's been a great economic engine for east Springfield, so certainly if it was to go away that would be disappointing for the city,” Springfield Office of Budget and Management Director Bill McCarty said.
First sales at JC Penney fell more than 26 percent in one quarter, then its credit rating was lowered again. Its stock fell to a three-year low on Monday.
“I don't think the issue for JC Penney is the local store," McCarty said. "I think the local store is one of the stronger ones in their organization."
The city of Springfield collects about $17,000 in property taxes, plus more money in sales taxes from the store. If it were to go out of business, there is one silver lining.
“Should that store close, that store--that location being in a TIF district--will be more appealing to another business, another organization that may want to come to the city of Springfield,” McCarty said.
That area is not yet a designated TIF district. Springfield City Council is still taking up the issue. JC Penney has not announced any plans to close. Its chief executive last told investors in September that things at the company would turn around.
There are 17 JC Penney stores in Illinois, according to the company’s website.