by Burke Speaker | January 16, 2014 10:24 am
Embattled clothing retailer JPenney (JCP) announced it’s closing 33 stores and laying off some 2,000 workers in a bid to improve the company’s finances and JCP stock.
JCPenney has not revealed holiday sales numbers (though JCP has said it was pleased but declined to give numbers) and the chain desperately needs a new plan to turn around from its previous attempts at a resurgence.
With news of the layoffs and store closings, many analysts believe the holiday sales were lackluster.
The cuts announced Wednesday should save more than $65 million each year. The company will take $26 million in pre-tax charges in Q3 and $17 million in future quarters.
JCP and JCP stock is still trying to recover from terrible losses in the past and a continued drop in sales.
Former CEO Ron Johnson was axed in April after being on the job for a little more than a year. (The company then brought back former CEO Mike Ullman.)
In the past year, JCP stock is down 64% — with really no way forward that’s been proposed for the struggling retailer.
While investors are looking to JCP for restructuring the closings and cuts instead look like another short-term strategy that is unlikely to pay off for the company.
An analyst for Morningstar Inc. stated that “the closing of 33 stores sounds like not all is well … It’s also not a massive restructuring.” (Via Los Angeles Times)
Check out the details of which stores are closing here.
JCPenney has 116,000 staffers and operates more than 1,100 stores.
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