JC Penny closes 33 stores

[Danno 1,228]

J.C. PENNEY TO SHUTTER 33 STORES, THOUSANDS OF LAYOFFS EXPECTED

NEW YORK (TheBlaze/AP) — Struggling department-store operator J.C. Penney announced it will cut 2,000 jobs and close 33 stores as it tries to get back on the path to profitability.

The news raises concerns that Penney’s holiday season sales were not what the company hoped for and that the chain needs to do even more to recover from a turnaround plan that has had disastrous results.

J.C. Penney Co., based in Plano, Texas, said earlier this month said it was pleased with its holiday results but declined to give sales figures, raising worries among Wall Street analysts about how the season actually fared.

“It was a season where they realized that they had to do more to reconnect with the customers they’ve lost,” said Brian Sozzi, CEO and chief equities strategist at Belus Capital Advisors.

The cuts announced Wednesday should save more than $65 million annually. The company will take $26 million in pretax charges in the third quarter and $17 million in future quarters. Penney has 116,000 staffers and operates more than 1,100 stores. All the job cuts are related to the store closings.

Penney is expected to be among a number of stores that will be announcing it will be cutting staff and closing stores in the next few weeks. After the holiday season, stores typically re-evaluate their store fleet and announce job cuts and store closings. But analysts believe that after a tough holiday season where stores had to discount early and often to get shoppers to buy in a tough economy, the cuts will be deeper than normal, says John Challenger, CEO of Challenger, Gray & Christmas, a global outplacement firm. Stores are also contending with a shift in consumer spending to PCs and mobile devices.

Macy’s Inc., a standout among its peers, announced last week that it was cutting 2,500 jobs as part of a reorganization to sustain its profitability.

“Retailers are having to come to terms with these consequences,” Challenger said.

The holiday season is crucial since it can account for anywhere from 20 percent to 40 percent of a retailer’s annual sales. But at J.C. Penney, the stakes are higher.

Penney is trying to recover from massive losses and plummeting sales drops that occurred under former CEO Ron Johnson, who was ousted in April after being on the job for 17 months. The company then brought back former CEO Mike Ullman.

Penney has since reinstated the frequent sales events that Johnson ditched. It’s also restored basic merchandise, particularly store brands like St. John’s Bay, which were either phased out or eliminated in a bid to attract younger, more affluent shoppers.

Penney had been releasing monthly sales figures over the last few months, which had showed some improvement. Sales at stores open at least a year edged up 0.9 percent in October – the first increase since December 2011. That’s a key indicator of a retailer’s health. Last month, the company said that revenue at stores opened at least a year jumped 10.1 percent in November, helped by a strong start to the holiday season.

But on Jan. 8, it offered no figures regarding December sales when it came out with a brief release to update investors on its holiday performance. It said that it was “pleased with its performance for the holiday period,” and that the holiday season showed “continued progress in its turnaround efforts.” It also reaffirmed its outlook for the fourth quarter that was first announced in late November. At that time, it said that Penney’s revenue at stores opened at least a year and gross profit margin will likely improve “sequentially” and year over year.

Penney’s shares fell 8 cents to $6.93 in after-hours trading Wednesday when Penney made the announcement, after gaining 8 cents to close regular trading at $7.01. The shares have lost 84 percent of their value since February 2012 when investor enthusiasm was high over Penny’s transformation plan.

http://www.theblaze.com/stories/2014/01/15/j-c-penney-to-shutter-33-stores-thousands-of-layoffs-expected/

[decocker 7,198]

JC PENNEY ! noooooooooooooooooooooooooooo. they're too big to fail!

(maybe this..."Penney is trying to recover from massive losses and plummeting sales drops that occurred under former CEO Ron Johnson, who was ousted in April after being on the job for 17 months. The company then brought back former CEO Mike Ullman" has more to do with the closures than the "historic RECOVERY")

[Darnell 8,479]

Huh? I though the store's problem was with it's Chinese supply chain .

[Danno 1,228]

JC PENNEY ! noooooooooooooooooooooooooooo. they're too big to fail!

(maybe this..."Penney is trying to recover from massive losses and plummeting sales drops that occurred under former CEO Ron Johnson, who was ousted in April after being on the job for 17 months. The company then brought back former CEO Mike Ullman" has more to do with the closures than the "historic RECOVERY")

Even a drowning man grabs for a straw.... yet that doesn't diminish the environment he finds himself.

Did you read this part too?

<<<Macy’s Inc., a standout among its peers, announced last week that it was cutting 2,500 jobs as part of a reorganization to sustain its profitability.>>>

[GandD 5,966]

I think malls in general are having a tough time. What part of the market share once owned by these types of stores has gone to Amazon and others?

[decocker 7,198]

Even a drowning man grabs for a straw.... yet that doesn't diminish the environment he finds himself.

Did you read this part too?

<<<Macy’s Inc., a standout among its peers, announced last week that it was cutting 2,500 jobs as part of a reorganization to sustain its profitability.>>>

and you think that retail profit sustainability has more to do with obama's handling of the economy than it does the actual business practices (like paying ceo's obscene amounts of money to totally restructure, poorly). gee danno, yet again i get the feeling you've no idea what you're talking about..

[Peikko 1,575]

It's a horrible store.

[JohnR! 5,495]

I think malls in general are having a tough time. What part of the market share once owned by these types of stores has gone to Amazon and others?

'Brick-n-mortar' stores are having a hard time competing with the internet, as one would expect. It is no different than what happened to mom-pop stores when Sears-Roebuck first introduced their catalogs. The internet created a new paradigm for consumers. China created a new manufacturing base for corporations.

Having said that however, I am sure all of this is, in fact, just another phase of the big, huge and incommensurable left wing conspiracy. Somehow I know Obama is to blame...

Edited January 16, 2014 by Gegel

[Mr. Big Dog 10,747]

I think malls in general are having a tough time. What part of the market share once owned by these types of stores has gone to Amazon and others?

Ding, ding, ding. We have a winner!

Brick and mortar retail is a tough business as online sales take an ever bigger share of the available consumer dollars. In this tough environment, JC Penney was grossly mismanaged. That's all there is to it.

[Peikko 1,575]

So, in conclusion. Danno was right, again. JC Penney is reducing its high street presence because Obama is president!

[JohnR! 5,495]

So, in conclusion. Danno was right, again. JC Penney is reducing its high street presence because Obama is president!

Absolutely. No doubt about it!

[Danno 1,228]

So, in conclusion. Danno was right, again. JC Penney is reducing its high street presence because Obama is president!

Yeah, but I only care to take credit when the prediction was not obvious.

Big Dog and others are hiding behind the growth in internet sales to excuse poor retail performance, what he doesn't do is show us the boom growth in things like Auto sales or R/Vs.

Edited January 16, 2014 by Danno

[GandD 5,966]

Yeah, but I only care to take credit when the prediction was not obvious.

Big Dog and others are hiding behind the growth in internet sales to excuse poor retail performance, what he doesn't do is show us the boom growth in things like Auto sales or R/Vs.

I buy my autos on the internets.

As for RV's, makes sense since the boomers are prime RV driving age.

[Danno 1,228]

I buy my autos on the internets.

As for RV's, makes sense since the boomers are prime RV driving age.

You buy your car locally through the web or in such a way that no car dealer gets the business.

[Teddy B 17,252]

I buy my autos on the internets.

Me too. The UPS driver has a heck of a time getting it off the back of his truck though.