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Closure of J.C. Penney at Burlington Center Mall a 'possible opportunity' to expand redevelopment, owner says

Closure of J.C. Penney at Burlington Center Mall a 'possible opportunity' to expand redevelopment, owner says

By Christina Roja
February 2, 2014

Another vacancy will hit the ailing Burlington Center Mall in early May when J.C. Penney closes its store there, but the mall’s owner insists the departure of the anchor store is not a setback, but a chance to include the space in its redevelopment plan.

The store is among 33 “underperforming” Penney stores set to close, signaling that the retailer is still struggling after several tumultuous years. The store at Quaker Bridge Mall in Lawrence was spared.

“The decision to close the store locations was made after careful analysis of store performance and future strategic fit for the company,” a Penney spokesperson said.

William Keep, dean of business at The College of New Jersey, said the Penney at Quaker Bridge was better positioned for customer traffic, and that had probably been a factor in keeping it open.

“These stores are not that far apart, but it also has to do with the competitive environment,” he said.

He pointed out that Quaker Bridge’s recent face-lift showed a reinvestment in the retail center.

“My guess is that J.C. Penney would see that as something supportive of trying to help or maintain or build a customer base there,” he said.

The revamp of the Burlington Center Mall and its adjacent land will hopefully help revitalize the shopping center and prevent the demise of other stores,
the mall’s owner, Las Vegas-based Moonbeam Capital Investments, said.

The company said it looks forward to incorporating the 102,704-square-foot Penney building into earlier plans for mall renovation.

The overhaul, which is expected to break ground in 2015, involves demolishing a former Macy’s store at the mall and replacing it with an open-air street of shops and additional national retail tenants, said Shawl Pryor, senior vice president of Moonbeam, which took over Burlington Center in 2012.

“We’re looking at the loss of J.C. Penney as a possible opportunity to take a development that is about 1.25 million square feet and expand it to something even larger,” Pryor said.

Penney, one of the oldest retailers in the nation, which at one time had a strong presence in the catalog and store marketplaces, has had to adapt to changing consumer tastes and shopping habits, Keep said.

“If 30 years ago, you said ‘I’m going shopping,’ I knew exactly what you meant, but if you say that today, I don’t know if you’re going to do it on the phone, when you get home on the computer, or if you’re going to drive to the store,” he said. “There are just so many options, and that challenges retailers to be very competitive.”

Keep noted that the decline of the middle class, the bread-and-butter for retailers like Penney and Sears, has thrown them into a different competitive environment.

“Who should J.C. Penney position itself to compete against? Is it Kohl’s? Is it Walmart? Is it Target? Who is it? And once they make that decision, how do they do it better than their competitor?” Keep said.

The disastrous leadership that plagued Penney in recent years caused the retailer to lose time in developing a strong competitive position, he said. Penney is still trying to recover from the massive losses that occurred under former CEO Ron Johnson, who was ousted after being on the job for 17 months. The company then brought back former CEO Mike Ullman.

“In my view, the error wasn’t necessarily that Mr. Johnson wasn’t a good retailer,” Keep said. “It was that he didn’t have a full appreciation of where J.C. Penney was as a culture. This wasn’t a matter of coming up with a winning retail strategy. It was a matter of moving the culture of the company and I don’t think he was up to the task.”

Consumers, Keep said, want three things every time they shop: They want to know that they can get what they expect, they want to be surprised and they want a satisfying experience.

“If you let them down on any one of those things, they won’t come,” he said.


Roja, C. (2014, Feb 2), Closure of J.C. Penney at Burlington Center Mall a 'possible opportunity' to expand redevelopment,,