J.C. Penney (JCP) is laying off 300 people at its Plano, Texas headquarters, making it the latest store chain to shed jobs in a tough environment for retailers.
Penney, which employs 3,400 at its headquarters, has seen its sales performance improve this year as it continues to recover from a disastrous attempt in 2012 and 2013 to become a hipper department store. In its second fiscal quarter (May through July), it reported that same-store sales rose 4.1%, easily outperforming rivals like Macy’s (M) and Kohl’s (KSS).
But CEO Marvin Ellison, who joined Penney a year ago as president after a long career at Home Depot (HD), has made it clear he wants to cut costs.
“As J.C. Penney works to achieve its financial growth targets, it is essential that our operations align with the strategic priorities of the company,” Penney spokeswoman Daphne Avila told the Dallas Morning News. So Penney “made the difficult decision to eliminate approximately 300 home office positions.” Avila did not immediately respond to a request for comment from Coins2Day.
A year ago, Penney laid out a plan to lift sales to $14.5 billion by the end of 2017 (for the year ending in January, analysts are expecting $12.6 billion, still billions of dollars below where the company was before its failed transformation under former CEO Ron Johnson.) But as dismal retail reports in August and September have shown, Penney is fighting in a very tough environment.
A few weeks ago, Penney cut its future $5 billion pension obligation by more than 25% after making lump-sum offers to 12,000 retirees and buying annuities for 43,000 others in a bid to clean up the debt-laden retailer’s finances.
The Penney layoffs come on the heels of job cuts at Walmart (WMT) and Neiman Marcus, which recently announced 450 and 500 job eliminations respectively. Earlier this year, Target (TGT) laid off thousands of workers.
