Penney's to Close in Philadelphia

J.C. Penney (Plano, Texas) has announced plans to close its Center City store at 11th and Market streets in Philadelphia, one of the anchors of the Gallery mall, in January. A company spokesman said the 184,000-square-foot store has not been profitable for some time. Penney said it plans to close 47 underperforming stores this year.

The closing is seen by Philadelphia politicians and commercial observers as a blow to downtown retailing in the city. “The failure of a store to retain selling power in the Gallery is scary,” said Edward Shils, director emeritus of the Wharton Entrepreneurial Center at the University of Pennsylvania. “The high-end stores that once lined the block across the street from the Gallery, between 11th and 12th streets, have all disappeared. Now there's low-end stores that compete with big discount chains.

“I think Center City has some retailing weaknesses,” he said. “What we need is a good balance of what I call high-quality stores, middle-class stores and small boutique shops.”

The center retains Kmart and Strawbridge's as anchors, and should get a boost in the fall when Old Navy opens a flagship store at the mall.