J.C. Penney will shutter a massive distribution facility in Buena Park and relocate the center to the Inland Empire, the company said Friday. It will also close up to 140 stores nationwide.
In a press release, the company stated it was “in the process of selling its supply chain facility in Buena Park in an effort to monetize a lucrative real estate asset.”
No details were provided regarding the number of employees who would be impacted by the looming closure.
The 1-million-square-foot, 24-acre compound at 6031 Orangethorpe Ave., was assessed at roughly $35 million last year, making it a valuable real estate asset for the troubled retailer. CoStar Group, a commercial real estate data provider, indicates the property, built in 1967, is used as a “hub for J.C. Penney’s West Coast operations.”
“The driver here is selling industrial facilities in Southern California,” said Louis Tomaselli, a senior managing director at JLL. “They could sell this million-square foot DC (distribution center) that is pretty antiquated and sell it for over $130 million.”
Tomaselli said the move to the Inland Empire makes economic sense for the retailer.
“They go sell a 40-year-old facility and then they lease a brand new facility … a brand new, state-of-the-art facility, a huge truck court. And they pay current market rates, which are well below what it would cost to operate the Orange County facility at the price level it was worth.
“This is happening all over Southern California,” he said.
The company said it would provide a store closure list by mid-March. A company map of stores indicates there are 79 in California. A rough count in the four-county Southern California region amounted to 33 stores.
J.C.Penney’s store closures represent about 13 percent to 14 percent of the department store operator’s current store count, and less than 5 percent of total annual sales. The company said that it would also initiate a voluntary early…