The closures represent less than 4% of JC Penneys total store base

The closures represent less than 4% of JC Penney's total store base

US department store retailer JC Penney has revealed it will close around 40 stores over the next year, resulting in 2,250 job cuts.

The store closures, which represent less than 4% of the company's total store base, will close on or around 4 April. The move came as a result of a review to determine whether there is a need to close or relocate underperforming stores.

"While it's never an easy decision to close stores, especially due to the impact on our valued associates and customers, we feel this is a necessary business decision," JC Penney said in a statement.

The move is something of a surprise as it comes in the same week that JC Penney hailed a solid performance over the holiday season, offering an optimistic outlook for the fourth-quarter. Comparable store sales for the combined November/December period grew 3.7% year-on-year.

The retailer said it also expects fourth-quarter comparable store sales to be at the upper end of its previous guidance range of 2-4 %.

However, UBS Investment Bank analyst Michael Binetti believes the stores being closed "are slightly smaller than average JCP boxes with sales/ft 10-20% below system average, and with negative 4-wall EBITDA margin."

He also points out that while the retailer has shuttered 100 units since 2011, its "accelerating closure activity is symptomatic of a wider scope issue from an under-productive and ageing real estate footprint." He adds: "We believe brick and mortar closures will be ongoing practice for several years."