J.C. Penney's internal growth initiatives aren't the only thing fueling its sales gains.
On a call with analysts following the company's fiscal second-quarter earnings report, CEO Marvin Ellison said the department store's sales have seen a lift in malls where a Sears has closed. As of April 30, Sears said it had closed 75 stores over past two years.
Similarly, some of the most recent Macy's store closures have been a net positive for the company, Ellison said. Macy's has closed 90 stores over the past six years, and on Thursday announced plans to close 100 more locations in 2017.
"Because the closings are well telegraphed there are specific things we can do to take market share," Ellison told analysts.
One of the reasons Penney re-entered the appliance business is because Sears has been ceding share, Ellison added. In Sears' fiscal first quarter, reported in May, its revenue cratered some $488 million to $5.4 billion. Appliances will be in 500 Penney's stores by the end of this year.
However, the boost to Penney's sales comes with a caveat. In some cases, the exit of large anchor tenants could put the nail in the coffin for a dying mall. In those cases, Penney's will take a careful look to determine whether it makes sense to close one of its stores, Ellison said. In many cases, anchor space is being filled with nontraditional tenants, including fast-fashion chains or gyms.
Overall, the CEO reiterated the company's commitment to physical shops, saying more than 50 percent of its online orders touch the store in some way. The company has closed roughly 50 shops over the past two years, but still has more than 1,000.
"We will not maintain any store or any strategic entity within our company that doesn't provide value to the customer," Ellison said.
For the fiscal second quarter, Penney's reported a narrower-than-expected loss of 5 cents a share, though its $2.92 billion in revenue fell just shy of expectations.