J.C. Penney Co. Inc. will shut down 300 catalog desks in Eckerd drugstores as part of a $90 million asset write-off announced yesterday.
The Plano, TX, retailer will leave open only 100 Eckerd catalog desks, where consumers can place or pick up JCPenney catalog orders. The desks failed to live up to expectations, the company said.
“It was just a test … and basically it's a matter of where the space is going to be reallocated for other purposes,” said Stephanie Brown, spokeswoman for JCPenney.
Concurrent with the Eckerd write-off, the retailer will also absorb a noncash charge of $185 million for JCPenney Department Stores and Catalog. The company this year will close 44 underperforming stores and three catalog outlet stores, affecting nearly 5,300 employees.
The Eckerd test was initiated right after JCPenney bought the Eckerd drugstore chain in 1996.
In other related Eckerd news, JCPenney will terminate its long-standing contract with Eckerd's information systems outsource provider. It also will lay off 265 employees in Eckerd's Clearwater, FL, headquarters and field organization.
JCPenney added that the asset write-off includes a portion of Eckerd's investment in e-commerce, “which is no longer a near-term strategic focus for the drugstores.”
The online store at www.eckerd.com will continue to sell products, however.
