Private equity firm Apollo Global Management will take Rackspace private in the all-cash deal.
Total sales fall 23% and store sales drop 22%.
The second quarter for J.C. Penney Co. was a bad one overall, but it was the web—and not stores—that took the biggest hit.
For the second quarter ended July 28, J.C. Penney, No. 20 in the 2012 Internet Retailer Top 500 reported:
- Web sales declined year over year by about 32.5% to $220.0 million from $326.0 million.
- Total sales decreased 23.1% to $3.0 billion from $3.9 billion in the second quarter of 2011.
- Comparable-store sales declined 21.7%.
- Net loss was $147.0 million compared with net income of $14.0 million in the second quarter of 2011.
The web accounted for 7.3% of all sales compared with 8.4% in the prior year.
Ron Johnson, the retailer’s CEO, says sales are down because of a weak economy, a cut back in marketing expenditures and the retailer’s transition from a business and merchandising model based on constant promotional pricing to a strategy grounded in set pricing at up to 40% off.
While Johnson says his company has time to put in place a successful transition, some retail analysts aren’t so sure. “It’s tough watching things chip away at Penney, which has been an e-commerce powerhouse,” says Jim Okamura, managing director of Chicago-based retail consulting firm Okamura Consulting. “Their e-commerce strategy is very much tied to their new permanent discount strategy and that may be limiting what they’ve been able to do online.”
For the first two quarters:
- Web sales declined year over year about 30.1% to $491.0 million from $702.0 million.
- Total sales decreased 21.1% to $6.2 billion from $7.8 billion in the first two quarters of 2011.
- Net loss was $310.0 million compared with net income of $78.0 million in the first two quarters of 2011.
The web accounted for 8% of all sales compared with 9% in the prior year.