By MARIA HALKIAS Staff Writer - Dallas Morning News
Published 24 January 2011 06:27 AM
More on this story J.C. Penney Co. invited activist shareholders onto its board Monday, saving it from a contentious proxy battle and perhaps keeping future differences behind closed doors.
Plano-based Penney also announced store closings and its final moves to exit the catalog business, changes that analysts said will probably be followed by more aggressive moves toward higher profitability.
Penney’s reorganization includes:
Closing five Penney department stores — in Morrow, Ga.; West Dundee, Ill.; Des Moines, Iowa; High Point, N.C.; and Culpeper, Va. — and a J.C. Penney Home Store in Duluth, Ga.
Completing the wind-down of its catalog business, including exiting its catalog outlets. Nineteen outlet stores will close by 2012, including the one at Grapevine Mills. It’s also closing a furniture outlet in Rancho Cucamonga, Calif.
Closing call centers in Grand Rapids, Mich., and Albuquerque, N.M.
Reorganizing its custom decorating in-store departments to 300 from 525 and shutting its Sacramento, Calif., factory and consolidating the work to a similar plant in Statesville, N.C.
The decisions announced Monday will result in a loss of about 3,800 jobs, Penney said.
The moves will allow the century-old retailer “to focus on its highest potential growth opportunities by reducing investment in areas of the business that no longer contribute meaningfully to its financial performance,” said Penney chairman and chief executive Myron “Mike” Ullman. Penney expects the moves to add to earnings in 2012 but result in charges in its fiscal 2010 fourth quarter that ends this month and i
“We see significant opportunities ahead in our core department store and online businesses as part of our long-range plan,” Ullman said. Those plans include launching two online stores this year and a chain of men’s big and tall stores, all under new brands.
Since early 2008, Penney has consolidated its store and Internet merchandise operations. With these changes, all clearance goods can flow through its 1,100 department stores and online. After it eliminates the call centers in Michigan and New Mexico, it will have just three centers, in Columbus, Ohio, Pittsburgh and Milwaukee, as customers shift to jcp.com.