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The Wall Street Journal reports Landlords Relish—or Fear—J.C. Penney Store Closings.

Real-estate executives said J.C. Penney could announce as few as 20 or as many as 200 stores will close. Shopping center owners will also be assessing how sustainable the company’s plan is for the remaining stores.

J.C. Penney said it prefers stores between 70,000 and 90,000 square feet, a sweet spot that enables it to display all its merchandise without having excess space, say property executives who spoke with the retailer. Some stores are as big as 150,000 square feet.

As with Sears, landlords are welcoming or dreading a J.C. Penney closing based primarily on how likely they are to find a preferable replacement.

Those with better-located shopping centers are eager for J.C. Penney (and its decades-old leases) to exit so they can attract higher-paying tenants. J.C. Penney pays as little as $3 a square foot in gross rent. Landlords say that they can get more than four times the rent for some of the spaces.

But owners of struggling malls are considering rent reductions to keep the chain from leaving. The department store’s departure could also allow other mall tenants to seek rent concessions or close their stores before their leases end without penalty.

No Reason for Being

What exactly does J.C Penney offer as a reason for being?

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I cannot come up with anything. More importantly, nor can the market.

J.C. Penney Monthly Chart

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J.C. Penney Looks Terminal

How many stores will J.C. Penney close in 2019? That's the wrong question.

Here's the right one: Can J.C. Penney survive at all?

For whatever reason, or no reason at all, millennials and generation Z abandoned the store.

It's a store with no reason for being. Unless it finds a reason for being, and quickly, it's destined to go the way of Sears, Montgomery Ward, and Payless.

Mike "Mish" Shedlock