American retail giant JC Penney has terminated its international licence agreements. This means that the JC Penney website, which launched in Australia a mere two months ago, will shut down.

Sharon Hooker, operations manager at JPIC Australia, said the website would shut down on 20 November, with a customer support office remaining open until the end of the year to ensure all outstanding orders are delivered.

“All I know at the moment is that the US company has terminated the licence arrangements that they have internationally and globally,” Hooker says. “Basically that’s it – shut the doors.

“The only thing I know is, I believe the original contract with the licencee had some sort of a loophole in it, and the Americans have decided to use this clause for whatever reason. We’ve been told nothing; our head office is in Singapore, and they are in negotiations at the moment, talking to lawyers and all sorts of things to see what can be done about it.

“Basically, because we have to close our doors, that will be it; we won’t operate a JC Penny website again, regardless of what happens legally. It’s a bit of a shock to us all.”

The move has, understandably, come as a surprise to everyone involved, with the site just launched on 1 September, “It’s been a reasonably expensive exercise to open up the office and put staff in place here,” Hooker says.

“At this stage, they’ve not said to us they’ve been losing money, or that it was a bad model; they’ve just said there’s an out clause and they’re using it. I believe there’s been a new international manager put in place; what his brief is, I’m not sure.”

Hooker says that the Australian team had really been getting its teeth into the market, with support in Australia tremendous.

“For the little advertising and marketing we’ve done, the orders we’ve taken in the last few months have been fantastic,” she says.

“I’ve spent this morning sending a blanket email out to our customers to explain we’re closing our doors and telling them they can make orders in the next couple of days.”

Hooker says that economically it may seem a viable thing for the US parent company to do, however it’s not actually costing the American company any money to have the presence in Australia, with the business being a standalone entity.