Penny's is actually doing the right thing that will help it to survive. When you exceed your optimum scale of enterprise, by opening too many locations, you greatly reduce your profit margin because your overhead becomes too high for you to maintain survivability. That, along with on line shopping, has contributed greatly to the demise of a number of "brick and motar" stores.
I hope it works for them and they do not become a victim like many other "big box" stores that we have witnessed closing down, and/or going out of business.