JC Penney is getting out of the appliance business, marking the first major change by new Chief Executive Officer Jill Soltau since she joined the struggling department store chain late last year.
The company's former CEO, Marvin Ellison, who's now chief executive of Lowe's, brought back appliances in 2016 after the retailer had spent more than three decades focusing primarily on soft goods like apparel. He saw an opportunity to get into the business as Sears, which has now filed for bankruptcy, was steadily losing market share.
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JC Penney said in a blog post Wednesday that it will no longer sell major appliances in its stores starting Feb. 28 "in order to better meet customer expectations, improve financial performance and drive profitable growth."
The company also said that furniture is soon only going to be available online and in select stores in Puerto Rico.
It plans to use excess space in stores, moving forward, to focus on its "legacy" categories like apparel and certain home furnishings like curtains and bedding, which it calls out as "higher margin opportunities."
JC Penney shares were last down more than 2 percent on the news, bringing the stock to around $1.30. The shares fell below $1 for the first time in December as its outlook appeared bleaker after the holiday shopping season.
Even with Sears shutting hundreds of stores, which some analysts said would benefit JC Penney, the retailer is still fighting to turn itself around. Within the apparel category, it's been dealing with too much inventory that needs to be discounted in order to make way for new styles. That's weighed on profit margins. JC Penney also still has more than 800 locations across the U.S. today, which is arguably too much real estate, as more purchases are being made online.
JC Penney said it will provide more details about its decision to get out of the home appliance business when it reports earnings Feb. 28. That's also when the retailer is supposed to offer details on additional store closures, which many analysts are already anticipating, in addition to the three stores that will close this spring.