J.C. Penney Co. Inc. said Thursday it will
cut 5,300 jobs, or about 2 percent of its work force, and close 47
stores as part of an effort to boost profits at the long-struggling
|Allen Questrom, new CEO for J.C. Penney, Inc.|
The stores being closed include 44 underperforming department
stores and three catalog outlets, Penney said. Most will be closed
in the first half of the year, the company said.
The Plano-based retailer operates about 1,100 Penney department
The closings will eliminate 5,000 store jobs and 300 jobs in
headquarters and field offices about 2 percent of the company's
work force of 290,000 employees. Penney said an undisclosed number
of store employees could be offered other jobs.
Penney said it would take a charge of $275 million, which
amounts to about 68 cents a share after taxes, in the quarter
ending Jan. 27.
Thursday's announcement marked the second recent round of store
closings. Last year, the company announced it would close 45
Once an icon for middle-class shoppers, Penney has been in a
years-long slide amid tough competition from discounters and
trendier retailers. Analysts blamed the company's prior management
for offering stale fashions and failing to respond to changes in
Chairman and chief executive Allen Questrom, a veteran retail
executive who took over at Penney in September, tried to assure
investors and employees that the company's cash flow and liquidity
"This restructuring program is an important step in our plan to
improve future performance and enhance shareholder value," he said
in a statement issued by the company.
A Penney spokeswoman said Questrom would not comment further on
the moves until Feb. 22, when the company reports results from its
fiscal fourth quarter.
Closing the stores will mean a loss of about $230 million in
sales this year and $350 million annually after that, the company
Penney issued a list of 39 of the 47 stores to be closed, saying
the others would be identified later this year. Employees at the
affected stores were notified beginning last week.
Four of the closing stores are in Indiana and three each are in
Illinois, North Carolina and Texas.
Many are in smaller towns, such as Susanville, Calif., and
Pratt, Kan. A few are in urban and suburban malls, such as Town and
Country Mall in Houston and Southwest Center Mall in Dallas.
Penney said it also would close most of the catalog desks within
its Eckerd drugstores. Only 100 drugstores of the approximately
2,650 Eckerds will continue to offer catalog sales, the company
Earlier this week, Eckerd officials said they would close five
to seven drugstores this year, which they termed part of a normal
review of store performance. Penney officials said they have not
identified which drugstores will be closed.
The fourth-quarter charge against earnings will include $185
million for shuttering department stores and $90 million for the
In the third quarter, Penney suffered $23 million in operating
losses, and officials have warned that the holiday season was
marred by disappointing sales and heavy price markdowns.
In later-morning trading Thursday, Penney shares fell 13 cents
to $12.69. Penney stock has slid more than 80 percent since