US: JC Penney to cut 2,000 jobs amid turnaround
Struggling US department store chain JC Penney is to axe 2,000 jobs and close 33 underperforming stores, as part of ongoing efforts to turn around its business.
The move, JC Penney says, is designed to save US$65m a year, starting in 2014. The company expects to incur $26m in pre-tax charges during the fourth quarter of fiscal 2013 and around $17m in future periods.
Inventory in the stores being shuttered will be sold over the next several months, with final closings expected to be completed by early May.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said CEO Mike Ullman.
"While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JC Penney for future success."
The news comes only a week after JC Penney said it was "pleased" with its performance during the holiday period, adding that its turnaround efforts were continuing to show progress.
Last month, the department store retailer posted a 10% increase in November same-store sales. Just a month before, Ullman said JC Penney's turnaround was beginning to take hold and that it was making "significant strides toward restoring JC Penney to its rightful place in retail".
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