JC Penney has has eliminated around 360 jobs at its headquarters, and at stores throughout the US, as it revealed fourth-quarter sales that missed expectations.
The Texas-based retailer said the cuts were part of its efforts to eliminate bureaucracy, reduce support positions and reallocate store headcount to customer-facing positions. Around 130 head office jobs were axed across various departments and 230 in regional offices and stores.
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JC Penney says that the cuts will lead to annual savings of roughly US$20m to $25m, and come just a month after it announced plans to close a large distribution centre and eight stores impacting 670 jobs.
The news came as the struggling retailer reported revenues that missed analysts expectations, sending shares plunging in early morning trading.
The company said comparable sales in the three months ended 3 February rose 2.6%, below analyst expectations of a 2.9% increase. Shares slumped 8% in premarket trading following a decline of 10% yesterday (1 March).
Total sales, meanwhile, edged up 1.8% to US$4.03bn and earnings reached $254m from $192m a year earlier. On an adjusted basis, earnings reached $202m.
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By GlobalDataJC Penney’s outlook, however, missed analyst expectations. The company is forecasting full-year earnings of between $0.05 and $0.25 per share, well below analysts’ average forecast of $0.20 cents, according to Thomson Reuters. Comparable store sales are expected to be 0.0% to 2%.
CEO Marvin Ellison said: “Our strategy and plan is clear and consistent, and we remain focused on two critical factors – to operate the business for growth and deliver profitable earnings.”
He said on an earnings call that fixing the women’s apparel business, particularly activewear, dresses, contemporary and casual sportswear, would be a “strategic priority” this year.
Also today, the retailer appointed Joe McFarland as executive vice president and chief customer officer; a newly-expanded role that includes responsibility for merchandising, as well as leading all JC Penney store operations. While Jodie Johnson has been promoted to head of merchandising for women’s, beauty and family footwear.
Additionally, James Starke has been promoted to head of merchandising for men’s, children’s, home and jewellery, and Therace Risch will assume the combined titles of chief information officer and chief digital officer.
