J.C. Penney is joining the growing list of traditional chains struggling to draw foot traffic into stores. The retailer announced Friday plans to close up to 140 locations and two distribution centers.
Macy’s, Sears and K-Mart all previously announced plans to close locations, and vacancy rates are rising at traditional shopping centers and malls.
Virginia Tech economist Sudipta Sarangi says they are all casualties of the changing face of retail.
“E-commerce and evolving fashion trends are driving factors. This becomes self-fulfilling. Lower sales make it harder to maintain physical stores,” said Sarangi. “Stock prices also fall making it harder for firms to finance physical operations.
“The demographic that shops in Penney’s is different. It’s mostly older folks. Young shoppers prefer online shopping and inventory that is virtually unlimited. Closing stories will help Penney’s more effectively compete against the growing threat of online retailers.”
Sudipta Sarangi is a professor and head of the Department of Economics in the College of Science at Virginia Tech. His fields of interest include applied game theory, experimental economics and development economics. Much of his current research focuses on issues relating to social networks.
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