J.C. Penney (JCP) - Get Report announced that it planned to close 130 to 140 stores as well as two distribution centers in the coming months.

The struggling retailer follows in the footsteps of Sears (SHLD) and Macy's (M) - Get Report , both of which have plans to shut stores to cut costs as shoppers move away from mall-based retailers. Traditional brick-and-mortar networks are scaling back their networks in an effort to save costs and take on e-commerce competitors.

The company also said it would be launching new products and services in order to cater to the changing preferences of its customer base. It is planning to add toys, home goods, beauty products and appliances.

Announcing the outlet closures, CEO Marvin Ellison maintained that the move will "allow us to raise the overall brand standard of J.C. Penney."

"We believe closing stores will allow us to adjust our business to effectively compete against the growing threat of online retailers," he added.

It is not known which of the company's stores will be closed. However, the closures are expected to affect 6,000 employees who will be offered voluntary retirement.

The stores shutting down represent about 5% of annual revenue, and have performed at levels significantly below that of other locations that are remaining open. It was expensive to run these stores given their lower productivity. Annual savings from the move to shut outlets and reduce headcount are estimated at about $200 million.

The company made the announcement about closing the stores while reporting its fourth-quarter earnings that exceeded analysts' expectations, even though same-store sales and revenue fell below forecasts.

J.C. Penney's recovery plans did not convince many. Shares fell by around 9% in early trading as doubts crept in on whether the closure of the outlets will be enough to spruce up sales. The company's 2017 outlook came up short of the three-year plan that it had announced earlier.

However, the company's fourth-quarter earnings per share (EPS) beat estimates by 3 cents at 64 cents. Revenues of $3.96 billion missed estimates by $20 million.

J.C. Penney also reported record online sales this holiday season.

The company has a high debt load of $4.7 billion and only $900 million of cash. Its debt-to-equity ratio of 4.0 is much higher than the industry average of 1.5, and companies like Nordstrom (JWN) - Get Report at 3.2 and Kohl's (KSS) - Get Report at 0.9.

The company's stock has slumped by nearly 40% since December, indicating it could be a good speculative buy. Analysts feel the stock has been oversold, and now is a good time to buy it.

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