In its second-largest acquisition, Amazon buys the company for $970 million.
The retailer is winding down catalog operations as it cuts costs.
After a tough 2010 in which annual web sales only grew 2%, J.C. Penney Co. Inc. is off to a better start this year.
For the first quarter ended April 30, J.C. Penney, No. 20 in the Internet Retailer Top 500 Guide, reported:
- Web sales increased about 6.5% to $376.0 million from $353.2 million in the first quarter of 2010.
- Total sales grew year over 0.5% to $3.94 billion from $3.92 billion.
- Comparable-store sales increased 3.8%.
- Net income increased 6.7% to $64.0 million from $60.0 million in the first quarter of 2010.
Internet Retailer calculates the web accounted for 9.5% of total sales compared with 9.0% in the first quarter of 2010.
“We are successfully implementing our merchandising initiatives, with strong gains in both our men’s and women’s apparel businesses,” says CEO Myron Ullman. “Additionally, the steps we have taken to manage our expenses position us to increase the flow-through of sales to the bottom line.”
Going forward in 2011, J.C. Penney is implementing or expediting other cost-saving initiatives including:
- Delivering $50 million in savings through more effective marketing and store management and headquarters cost-cutting.
- Restructuring the company’s supply chain to save $25 million to $30 million 2013, including $12 million to $13 million in 2012.
- Save $25 million to $30 million by 2012 by winding down its catalog operation and discontinuing its outlet stores operation.
“The company sees opportunity to continue to grow sales by improving the sales productivity in its stores and on JCP.com, through the continued success of its growth initiatives and exclusive attractions like Liz Claiborne and Sephora inside J.C. Penney, while increasing profitability at an accelerated rate by optimizing its expense structure,” says Ullman.