Our Views: Penney’s closing could boost Janesville business in long run
Sad news hit home Wednesday when word emerged that JCPenney would close its Janesville Mall store in May.
It’s especially sad for about 70 workers who, unless they relocate to other Penney’s stores or quickly find new work, will lose their jobs and income that helps support families.
It’s also sad given Penney’s history here. Longtime residents recall shopping at Penney’s when it, Sears and Bostwick’s clothing store lured throngs during downtown Janesville’s halcyon days. Penney’s occupied the spot that Rock County Appliance and TV Sales took over when Penney’s, in 1975, became the new Janesville Mall’s northern anchor store.
But the retail chain that James Cash Penney launched in 1913 fell on hard times in recent years. In 2011, Penney’s announced it would drop its familiar catalog business and hired Ron Johnson as CEO. In 2012, Johnson announced a new “Every Day” pricing strategy in which merchandise on most days reflected what used to be sale prices. That and other marketing methods failed to lure customers accustomed to retail discounts. By year’s end, sales were off 25 percent. Penney’s fired Johnson in 2013.
Struggles continued, and the company reported a 2013 third-quarter earnings loss of $457 million. Penney’s stock plummeted almost 80 percent the past two years. Even this week’s announcement that Penney’s would close 33 stores nationwide—including four in Wisconsin—and shed 2,000 jobs did nothing to inspire investors.
Outside of the loss of jobs and this local history, given Penney’s dismal track record of late, perhaps good will rise from this bad news. Gale Price, the city’s building and development services manager, pointed to redevelopment activity along Milton Avenue and expects interest in filling the mall vacancy to come sooner rather than later.
Dan Summerlin of mall owner CBL & Associates Properties also sounded hopeful. He said CBL has added or redeveloped 75 mall anchors and “junior anchors” the past three years. That record bodes well for filling the vacancy. He says his company has ideas for either replacing the retailer or retrofitting the space for multiple stores.
You would expect Price and Summerlin to express optimism. You don’t stir interest with negativity that leads companies to believe the supply of retail space outstrips demand.
However, the timing of this closing is better than it would have been five years ago right after General Motors shut its Janesville factory. Developments are occurring on the Milton Avenue/Highway 14 business corridor. Small shopping centers have popped up in big-box parking lots in recent years. Before Scott Acker opened a Quaker Steak & Lube last year off Highway 14, he visited Janesville and found that corridor vibrant, and he saw little of the destitution he expected given GM’s closing. Friday’s Gazette reported that the popular Panera Bread will open a restaurant in Janesville this year.
A retail anchor that struggles to attract customers does little to create spillover traffic for neighboring stores and restaurants. Maybe the loss of Penney’s, while sad, will benefit Janesville business in the long run.