J.C. Penney Profit Sinks 51% in Q4
New York City J.C. Penney Co. reported a 51% drop in fourth-quarter profit on Friday as customers continued to cut spending on clothing and other more discretionary items.
The company said it earned $211 million for the three months ended Jan. 31, compared with $430 million a year earlier.
Sales dropped almost 10% to $5.76 billion from $6.39 billion. Same-store sales fell 10.8%.
As of Jan. 31, J.C. Penney said it had cash and cash equivalents of $2.4 billion and long-term debt of $3.5 billion. Merchandise inventories totaled $3.3 billion and were about 13.5% lower than last year on a same-store sales basis. Capital expenditures were approximately $970 million in 2008, moderately lower than the company’s $1 billion plan.
The company also said on Friday that it has decided not to hold its annual analysts’ meeting in Plano, Texas, because of many firms’ constrained travel budgets. Instead, it will hold the meeting in New York City on April 22.
JCPenney to sponsor Rascall Flatts tour
PLANO, Texas JCPenney announced that it is the official sponsor of the “Rascal Flatts American Living Unstoppable Tour” presented by JCPenney. The tour will promote American Living, the retailer’s affordable, all-American lifestyle brand developed exclusively for the JCPenney customer by Polo Ralph Lauren’s Global Brand Concepts. The fully integrated two-year sponsorship will kick off June 5, with the tour hitting approximately 60 cities across the nation each year.
In conjunction with the tour, Rascal Flatts has written a new song inspired by the spirit of the brand titled “American Living,” which will serve as the soundtrack for the new American Living commercial. The song will only be available on a special version of the Unstoppable CD sold at JCPenney stores.
“Representing true Americana, Rascal Flatts’ music transcends genres and resonates strongly with our customers – the more than half of America that shops at JCPenney each year,” said Mike Boylson, chief marketing officer for JCPenney. “With Rascal Flatts’ significant crossover appeal and passion for the brand, our fully integrated sponsorship of ‘Rascal Flatts American Living Unstoppable Tour’ is a perfect canvas to highlight American Living and its true American values.”
The new Rascal Flatts song “American Living” will be available exclusively on a special version of their new Unstoppable album, to be sold at JCPenney beginning on April 7. All net proceeds from the sale of albums will be donated to the JCPenney Afterschool Fund, which provides children in need with access to life-enriching afterschool programs that inspire kids to be smart, strong and socially responsible.
Borders cuts more jobs
ANN ARBOR, Mich. Borders Group announced that it has reduced its corporate work force by another 136 positions, which were eliminated effective Feb. 19. The majority of the jobs, which represent about 12% of the corporate work force but less than 1% of the company’s total work force, are based at the company’s headquarters in Ann Arbor.
According to the company, the work force reduction was spread across virtually all business areas, including marketing, human resources, field management and corporate sales. The reductions were made at various ranks, ranging from entry level to middle management. Affected employees are being offered transition pay, severance and job placement assistance.
“While reducing payroll is never easy and we respect the impact it has on employees and their families, it is one of the necessary steps we must take along with other non-payroll expense reductions to help get this company back on track financially,” said CEO Ron Marshall. “In this time of transition, I greatly admire the tenacity and focus that employees at all levels here have shown as we drive to significantly reduce expenses and bring other key financial measures in line. We will continue to move forward with deliberate speed to make the changes required to get Borders back on firm financial footing.”