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Hernando Today

JCPenney's Woes Won't Carry Over To New Plaza

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By TONY HOLT

Hernando Today

Published: February 21, 2009

SPRING HILL - JCPenney was supposed to be the anchor store that would reel in herds of deep-pocketed shoppers at the county's newest plaza.

The chain on Friday reported a 51 percent slide in its fourth-quarter profits and now it is anticipating bigger losses in 2009.

That might be considered bad news for Nature Coast Commons, a sprawling new shopping center along Commercial Way, just south of Spring Hill Drive.

It could be worse. The plaza could be anchored by a Sears.

"Between Sears and JCPenney, I'd say JCPenney is a much more profitable chain," said retail analyst C. Britt Beemer, who said Sears' business model is more old-fashioned by comparison.

JCPenney's decision to break free from malls and establish itself as a stand alone store might be what saves it in the long run, Beemer said. A slumping anchor store can doom a mall, but it won't do much to hurt the junior anchors at an outdoor shopping center like Nature Coast Commons.

Sears is almost entirely mall-based.

Stores such as Best Buy, the Sports Authority and Mattress Giant will attract enough customers on their own. They are not as reliant on the success of its anchor as a smaller store inside a mall would be, Beemer said.

Beemer is the founder of America's Research Group, a consumer-behavior research firm out of Charleston, S.C.

JCPenney earned $211 million in the fourth quarter of the fiscal year that ended Jan. 31. A year earlier, it earned $430 million, according to the chain.

Same-store sales, or sales at stores open at least a year, dropped by nearly 11 percent during the fourth quarter. That does not include the Spring Hill location, which opened in March 2008.

"(JCPenney's) earnings are down because they've had to discount so much of their merchandise to bring people to their stores," Beemer said. "Having a JCPenney as an outside, free-standing store is a good thing. That is their future. Those are the kinds of centers that are going to work out."

Reporter Tony Holt can be reached at 352-544-5283 or wholt@hernandotoday.com.

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