J.C. Penney woos Brooklynites while closing stores elsewhere

  • Article by: SELINA WANG , Bloomberg News
  • Updated: August 13, 2014 - 9:06 PM

The struggling chain will open a store in Brooklyn with hopes of success.

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Success of the J.C. Penney Co. store in Elmhurst, N.Y. was the inspiration for the building of a new store in the borough of Brooklyn.

Photo: Emile Wamsteker • Bloomberg News,

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J.C. Penney Co., the department store chain synonymous with sleepy suburban malls, is coming to the land of brownstones and artisanal cheese: Brooklyn.

Even as it closes 33 underperforming stores across the country, J.C. Penney is opening a 124,000-square-foot location in the New York borough on Aug. 29. In an attempt to attract urbanites, the store will have large murals of Brooklyn landmarks at the entrance and an eco-friendly design that uses 45 percent less energy than the typical J.C. Penney store.

“We saw the need to fill a void in this high potential market,” said Joseph Thomas, a spokesman for the Plano, Texas- based chain.

The move is part of a comeback effort for the long-struggling company, which reports its latest results this week. J.C. Penney showed signs of recovery in its previous earnings in May, posting its first quarterly sales gain since 2011. Still, the chain continues to lose money and a broader retail slump has hurt its prospects.

Craig Sterling, an analyst at EVA Dimensions in New York, says J.C. Penney probably isn’t ready to be opening new stores. It has too many as it is.

“Their store closings aren’t happening fast enough,” he said. “J.C. Penney is the last company that should be spending money on growth.”

The new location isn’t in a hipster enclave like Williamsburg — it’s in the Gateway Center mall, not far from Kennedy Airport and Jamaica Bay. The center includes other large chains such as Target Corp. and Home Depot Inc. Wal-Mart Stores Inc. tried and failed to open a store in the area in 2012 amid local opposition to the big-box retailer.

The move makes sense for J.C. Penney if the new location is as productive as its store in the Queens Center mall, said Rick Snyder, a retail analyst at Maxim Group in New York. Gateway Center is situated in Spring Creek, a bastion of affordable housing. J.C. Penney could provide convenience for locals looking for discounted retail, eliminating the need to travel to other boroughs to visit the chain.

Even so, J.C. Penney has a bad track record of growing profitably, said Sterling, who called the Brooklyn move a “terrible decision.”

“They should get their house in order before they do that,” he said.

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