"It's a sensitive issue," Tim Lyons, the retailer's official spokesman, told GlobeSt.com. Some stores have been notified and others are still awaiting the death notice.

The news is mired in more uncertainty, with talk circulating about the fate of the 1.9-million sf corporate headquarters in Plano. The 125-acre campus employs 3,000, according to the retailer's Web site. Lyons says there has been rumor of a corporate downsizing, but no mandate has accompanied the shutdowns of the chain's under-performers. JC Penney's had opened the campus within three years of its move to Dallas from New York City in 1988.

Lyons says he has been fielding telephone calls all day from newspapers trying to find out which stores are on the hit list. But, the company's not giving-at least not at this time. "We're not sure how we're going to communicate the information," he says. Death knells definitely have sounded for the 149,000-sf anchor spot at Irving Mall; the 196,000-sf store at Southwest Center Mall in Dallas; and the 155,000-sf Town & Country Mall in Houston. Tarrant County's four stores will remain open, as will all of the locations in Austin, GlobeSt.com has been told.

The retailer controls more than 118 million sf in 1,140 stores in the 50 states, Puerto Rico and Mexico. Not only is a majority of that space in the nation's premier malls, but it also makes JC Penney the largest tenant of all US department store retailers, according to its e-tail site.

Hoover's Online says the retailer has been closing Eckerd drugstore operations as well as department stores. According to Hoover's, JC Penney had a $336 million net income in year 2000, with sales up 6% to $32.5 million and an employee count of 291,000 or 11.1% more than in the previous year. Now, some of those employees are being handed pink slips in the wake of the retail world's squeeze on mid-price merchandisers, taking down all the big names in some fashion.

JC Penney is just the latest to fall. More mid-price retailers will follow the lead set by Sears & Roebuck. Some could go the way of Montgomery Wards. Steven A. Lieberman, president of Dallas-based The Weitzman Group, says it's too early in the year to know how soft the retail market's going to get or who's going to fall next.

These days, it's a Catch-22 for mid-price merchandisers, who are caught in a squeeze play from high-end and discount retailers. "There used to be a wide gap in the middle," says Lieberman. "Both sides have moved toward the middle." But, he says, it's not a new phenomenon: "We've been seeing this for 10 years not just 10 months."

Some retailers, such as Gap, have been responsive to the changing market. The vacated Saks Fifth Avenue at Dallas' upscale Galleria appears ticketed for a Gap version of the store-within-a-store concept by bundling multiple retail specialty stores into one anchor spot. The not-so-innovative retailers, Lieberman told GlobeSt.com, are paying the price at the cash register.

Meanwhile, retail's changing face is driving more mall developers to start hybrid operations, using some of the vacated anchor space to create power centers. There may even come a time when big box decides to test the market from inside a mall instead of a neighboring property, but first there are issues that need to be worked out, specifically operating covenants, explains Lieberman. The survivors will be those mid-price retailers "who respond to the opportunities in an innovative way," he says. "Our business is still built on having the best locations."

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