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Tag: j.c. penney

  • Sam’s Club Will Lay Off 2% Of Its Workers

    Sam’s Club Will Lay Off 2% Of Its Workers

    In its largest wave of job cuts in four years, Wal-Mart Stores Inc announced Friday that it would be cutting 2 percent (2,300 jobs) of its workforce at its Sam’s Club retail warehouse chain; Sam’s Club has an estimated 116,000 U.S. employees with 600 locations nationwide.

    The layoffs are a reaction to compete with big name rivals like members-only warehouse club Costco and online competitors like Amazon.com’s Prime membership service, Wall Street Journal first reported on Friday.

    According to Bill Durling, head of corporate communications for Sam’s Club, less than half of those being laid off are assistant managers with the remaining being hourly workers. Prior to the announced cuts, Sam’s Clubs’ fresh sections – segments of the store that sell produce, dairy, seafood, poultry, meat and baked goods – had six managers. Half of those jobs will be cut with the remaining three fresh section managers’ wages increased, Durling said.

    “This is not the type of situation where we are showing people the door and handing people a check.” Durling said.

    “Everyone who is impacted today gets paid for 60 days and [we are] encouraging our associates to look for other opportunities at other Sam’s Club or Wal-Mart.”

    Durling mentioned that after 60 days, if affected employees aren’t able to find a job, they would be eligible for a severance pay.

    Sam’s Club isn’t the only major retailer announcing job cuts this year.

    Macy’s said earlier this month it plans to cut 2,500 jobs, or, 1.4 percent of its U.S. workforce, despite expecting new positions for its online store.

    J.C. Penney also chimed in with grim news last week about closing 33 stores and eliminating 2,000 jobs in order to return to profitability.

    Target said it eliminated 700 vacant positions worldwide over the last six months and will lay off 475 workers at its headquarters and other offices in Minnesota.

    Pictures via WikiCommons

  • Penney Store Closings of 33 Locations Will Cut 2,000 Jobs

    On Wednesday, January 15th, J.C. Penney Co. announced the shutdown of 33 stores mainly located in smaller markets that have been experiencing a continual decline in customer visits.

    According to Chief Executive Mike Ullman, the clothing company chain has experienced a drastic fall in sales and the closing of selective locations will help to improve the performance of the company’s stores.

    This in result will affect present-day workers of Penney, which operates more than 1,000 locations and employees over 100,000 staff members. A staff cut of 2,000 workers is expected to occur within the next few weeks and will be completed by May.

    The company, who has endure nine quarters without a successful profit, proposes that this strategy will help revive their loss by saving $65 million annually.

    The company has not closed a large portion of its stores since 2001, but unfortunately, the ex-CEO’s prior strategy of replacing sales and discount promotions with low prices caused the company to plummet in revenue.

    J.C. Penney to close 33 stores, cut 2,000 positions. http://t.co/6RzqIhrPUq

    Ullman, who replaced former CEO Ron Johnson in April, “has restored promotions, brought back popular private-label brands and reinstated commissions for some salesmen while ending his predecessor’s strategy of remodeling the stores into collections of boutiques,” according to Bloomberg.

    Kirk Ludtke, an analyst of CRT Capital Group, agrees that Ullman’s new strategy has improved the condition of the store.

    “I think he’s done a good job of stabilizing the situation,” Ludtke reported to USA Today.

    Ludkte also states that Penney’s closing will assist them in catching up to other national chains in the market.

    However, Penney’s is not the only clothing company going through a setback.

    Macy’s announced last week that it plans to cut 2,500 staff workers, close down a few stores but open new locations as well.

    Analysts have concluded that early discounts during the holiday season were not too kind to retailers across the nation, which ultimately resulted in the reevaluation of store performances and profit.

     Image via Wikimedia Commons

  • J.C. Penney Announces The Closing of 33 Stores Nationwide, Cuts 2,000 Jobs

    On Wednesday, Jan. 15 the J.C. Penney Company, Inc. announced that it would be closing a total of 33 stores across the United States.

    In a brief press release earlier today, the ailing retail chain stated that the executive order was made as apart of the company’s ‘turnaround effort’ to focus its attention on opportunities with the highest growth potential. The 33 stores that have been selected for closure are categorized as underperforming locations.

    The store closures are projected to assist the retailer with retaining substantial profitability, with an annual cost savings of approximately $65 million. The company also projects to incur approximately $26 million in pre-tax charges for the fourth quarter of the 2013 fiscal year, and $17 million for future quarters thereafter.

    It was also stated that the store closures will eliminate approximately 2,000 jobs. However, eligible associates who ultimately end up leaving the company will receive a separation benefits package.

    J.C. Penney’s chief executive officer Myron Ullman III also issued a statement of address in regards to the announcement. “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 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 JCPenney for future success.”

    According to CNN Money, last year was financially daunting for the mid-range department store. The company has reportedly suffered a staggering stock plunge of approximately 60% over the past 12 months, with a deficit amounting to hundreds of millions of dollars per quarter.

    The company’s press release also included an official list of the stores that will be closing.

    J.C. Penney’s announcement comes just one week after Macy’s announced that it would be closing five stores, and laying off 2,500 workers.

    Image via Facebook | JCPenney

  • J.C. Penney Apology Ad Asks Customers to Come Back

    It’s no secret that J.C. Penney has been losing customers over the past year.

    The company hired Apple exec Ron Johnson as CEO and began turning the department store pricing model on its head. Instead of setting high prices with constant sales and coupons, the company instead decided to price its clothing at moderate to low prices and ditch the coupons. The strategy was a disaster, and J.C. Penney now finds itself with an estimated $3.5 billion in debt.

    Even though the company has ousted Ron Johnson and received billions in loans, the company has a long way to go to rebuild its image with customers. To that end, J.C. Penney this week released a new ad that is an explicit apology to customers who have abandoned the store.

    The ad, titled “It’s No Secret,” admits that J.C. Penney “changed” recently. It goes on to state that the company has learned from its mistakes, and will now be listening to its customers. It explicitly asks customers to “come back to J.C. Penney.”

    J.C. Penney also appears to be engaging with customers quite a bit more on social network sites such as YouTube and Facebook. The store is acknowledging customer complaints and revealing information such as the fact that the St. John’s Bay brand will be coming back to J.C. Penney stores.

  • J.C. Penney: $1.75B Loan Taken From Goldman Sachs

    In early April, J.C. Penny CEO Ron Johnson stepped down following over one year of dismal financial results at the company. Johnson had attempted to turn the department store business on its head, eschewing sales and coupons in favor of consistently lower pricing, but the company’s board was forced to make changes due to a plummeting stock price and an estimated $3.5 billion debt.

    It seems, however, that not everyone has written off J.C. Penney. Investment bank Goldman Sachs has issued a five-year $1.75 billion loan to the troubled department store. J.C. Penney stated that the funds will be used to fund “ongoing working capital requirements,” “general corproate purposes,” and part of its debt. The loan is secured by real estate and interest in J.C. Penney.

    “This loan facility is an important component of our strategic plan to strengthen the Company’s financial position,” said Ken Hannah, CFO of J.C. Penney. “Together with our revolving credit facility, this will give us the financial strength we need to meet our current funding requirements and build toward a successful future.”

    This loan is in addition to the $850 million that J.C. Penny borrowed from a revolving credit fund two weeks ago. The company stated that loan would go toward ensuring the company’s liquidity and to replenish inventory at its stores.

  • J.C. Penney: $850 Million Borrowed to Shore Up Inventory

    J.C. Penney today announced that it has borrowed $850 million from a revolving credit fund of $1.85 billion. The company stated that the money will be used to ensure the company’s liquidity and replenish inventory levels.

    “Earlier this year, we increased our revolving credit facility in anticipation of operating, working capital and capital expenditure needs, especially during the first half of the year,” said Ken Hannah, CFO for J.C. Penney. “As we near completion of the home department transformation in over 500 stores, we have been undertaking and will continue to experience a significant inventory build and increase in capital expenditures.”

    J.C. Penney CEO Ron Johnson stepped down last week after just over one year with the company. Johnson had attempted to move the retail company away from the modern department store strategies of constant sales and coupons. The strategy did not succeed, and J.C. Penney stock and revenue fell while debt rose. The company is now estimated to be more than $3.5 billion in debt.

    “While jcpenney has faced a difficult period, its legacy as a leader in American retailing is an asset that can be built upon and leveraged,” said Mike Ullman, who replaced Johnson as acting CEO. “To that end, my plan is to immediately engage with the Company’s customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the Board to develop and clearly articulate a game plan to establish a foundation for future success.”

    J.C. Penney’s pricing strategy has already begun to shift. The retailer is issuing coupons, and clothing prices are expected to rise in preparation for sales.

  • Fake J.C. Penney Prices Are No More, Store Says

    It’s a rather sneaky way of doing business, but getting into the heads of customers and making them think they’ve gotten a better deal than they actually have is something retailers have been doing for decades. Rather than putting a fixed price on an item, they’ll put an original price–often jacked up to twice what they’re really selling it for–as well as a sale price. Finding a cute top for $40 is much more of a steal when you find it marked down to $15 or $20, right?

    That’s what retailers are hoping you’ll think, and the practice is called “anchoring”, meaning your perception of the item’s value is set right away. Seeing it marked down to half or less than half off means you’re more likely to buy it, even if you might not need it, and in today’s economic downturn, that’s the last thing shoppers want to do.

    Stores are catching on to what their customers want, however, and J.C. Penney is one of them. Part of a new overhaul for their entire system includes pricing items at what they actually are–“Everyday Prices”–which will not be reduced in weekly sales. Instead, the store will conduct month-long sales on certain items, and clearance sales will be on the first and third Friday of every month. Every item will have a new simplified tag to keep customers from getting confused, and that includes setting prices at a flat number instead of ending in .99.

    J.C. Penney saw a sharp decline in sales over the past several months compared to their competitors, and Ron Johnson, C.E.O., admits he knows why.

    “Our stores are tired; they haven’t been updated,” he said. “So customers ignored us 99 percent of the time. At some point, you, as a brand, look desperate if you have to market that much.”