Struggling JC Penney lays off an additional 2,200 workers
Published 3:04 pm Friday, March 8, 2013
NEW YORK — J.C. Penney Co. confirmed Friday it’s eliminating an additional 2,200 jobs as the struggling department store chain slashes costs after a year of plunging sales and mounting losses.
According to Joey Thomas, a company spokesman, those being axed work in back-office administration in stores and district offices. He noted that the cuts translate to an average elimination of two positions per store.
The cuts come as Penney lost $4.3 billion in revenue for the year as a strategy launched in early 2012 by CEO Ron Johnson to scale back most sales in favor of everyday prices has failed to resonate with shoppers. The pricing strategy is a key element of Johnson’s bigger plan to reinvent Penney’s business that also includes installing shops filled with hip new brands to replace racks of clothing.
Penney reported last month its quarterly loss widened to $552 million, or $2.51 per share. Revenue slid by a quarter to $12.98 billion.
Results for the full year were even more staggering. Penney lost $985 million, or $4.49 per share, for the fiscal year, compared with a loss of $152 million, or 70 cents per share, a year earlier. Revenue dropped 25 percent to $12.98 billion from $17.26 billion.
The latest blow to struggling Penney: One of its biggest shareholders confirmed Wednesday in a regulatory filing that it’s sold more than 40 percent of its stake. The move by Vornado Realty Trust is perhaps the biggest indicator yet that investors are losing patience with the turnaround strategy.
