The days of selling to Walmart and Target are numbered, according to the new owners of a $1.6 billion online clothing and footwear retailer, JC Penney.
A deal between the companies’ parent companies, Wal-Mart and Target, calls for the retail giants to cut some staff, slash prices and streamline operations.
The deal, the first of its kind in the country, comes as the retail landscape is undergoing a major overhaul with competition from Amazon.com Inc., which is also expanding its presence in the retail business.
Walmart and Target were both founded in the late 1950s, with stores opening at a fraction of the speed of the online shopping world, and each had some of the biggest names in the business, including Macy’s Inc. and Sears Holdings Corp.
Both are still profitable and have some of America’s largest online stores.
But the companies have struggled with shifting customers and the changing consumer habits.
Last year, Walgreens Inc., the country’s second-largest retail chain, announced it would close its flagship location in New York City.
Walmart also closed a number of its stores in the United States in recent years.
And Wal-mart said last month it would shutter its brick-and-mortar stores in its U.S. locations, which have been the largest and busiest.
The $2.2 billion deal for JC Penneys, a $5.6 trillion company with stores across the world, comes in the midst of a global expansion and a push by some investors to make online shopping as efficient as brick- and-mortier stores.
The online giant said it will cut roughly 400 full-time workers and reduce its workforce from around 1,000 employees to about 500.
It will also eliminate more than 300 jobs in the U.K., Australia and South Korea.JCPenney also said it plans to sell about 1,200 of its brick and mortar stores worldwide, or close about 20 of them.
It said it would sell about half its online store brands.
Wal-Mart is seeking to increase its presence as more shoppers are moving online, but the move comes at a time when Amazon.
Com is expanding into the retail industry.
WalMart has also made moves to sell to smaller retailers, including Target and Home Depot Co. Home Depot is seeking about 3 million workers.
Target plans to buy back about 700 stores and shut down about 1.3 million of its U-turns and closings over the next year.
Wal- Mart has already spent $3.4 billion to buy rival department store Nordstrom.