Department-store operator J.C. Penney says it will cut 2,000 jobs and close 33 stores as it tries to turn around results. One of the stores is in Colorado.
The news comes after J.C. Penney earlier this month said it was pleased with holiday results but declined to give sales figures. A strong November and December is crucial to retailers since it can account for up to 40 percent of annual sales.
Penney is trying to recover from a sales spiral that occurred under former CEO Ron Johnson. The company brought back former CEO Mike Ullman in April.
According to J.C. Penny, the actions are expected to result in an annual cost savings of approximately $65 million, beginning in 2014. In connection with this initiative, the Company expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods.
Remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May, J.C. Penny said in a release to investors on Wednesday. The closings will result in the elimination of approximately 2,000 positions. Eligible associates who do not remain with the Company will receive separation benefits packages. Meanwhile, the Company is continuing its plans to open a new store location later this year at the Gateway II development in Brooklyn, N.Y.
"As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly," said Myron E. (Mike) Ullman, III, chief executive officer of JCPenney. "While it's always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success."