J.C. Penney to Close Underperforming Stores, Catalog
January 24, 2011,
PLANO, Texas-J.C. Penney will close five underperforming stores, "wind down" its catalog and outlet operations and streamline both its call center operations and custom decorating business in an effort to focus on growth opportunities in the future, the company said this morning.
"We are focused on increasing profitability and accelerating our growth," said Myron E. (Mike) Ullman, III, chairman and chief executive officer, said. "To achieve this, we undertook a thorough evaluation of our operations to ensure we are managing costs and allocating our resources to the strategies that will best drive both our top and bottom line, with the objective of delivering enhanced returns to shareholders."
It will realign its call center operations by closing facilities in Grand Rapids, Mich. and Albuquerque, N.M. and consolidate all activity supporting its department store and online customers into three existing facilities in Columbus, Ohio, Pittsburgh and Milwaukee. The company will also close its custom decorating fabricating facility in Sacramento, Calif., leaving one facility remaining in Statesville, N.C.
J.C. Penney expects these changes will positively affect its bottom line in 2012, the first full year of implementation, by approximately $25 to $30 million. Additionally, there will be estimated one-time charges of approximately $30 million in the fourth quarter of fiscal 2010 and approximately $20 million during 2011 to reflect the transition.
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