In April, the chain had already announced a loss of 600 jobs in its headquarters, so the new announcements lifts the job loss this year – in Plano alone – to almost 1000. J.C. Penney is undergoing a radical transformation: price politics have been thoroughly adjusted and all 1100 shops have been restyled. According to the company, the cutbacks will contribute to its plan to lower yearly costs by 900 million dollar by the end of 2012.
The transformation of J.C. Penney included the ending of coupon actions and sales actions, but has been off to a poor start. The company’s turnover decreased by 18.9 percent in the first quarter of this year and was accompanied by an unexpected net loss.
When the company announced its reformation plan in January 2012, it still assumed that it would be able to cut down the yearly costs with 200 million dollars through job cuts. In the same month, J.C. Penney announced that the general costs, the administrative costs and the sales costs amounted to 31 percent of the turnover in 2010, when the same costs at competitor Kohl only totalled up to 21 percent.
Translated by Sanne Raspoet