J. C. Penney Company Inc
. (
JCP
), a leading retailer of apparel and footwear, accessories, fashion
jewelry, beauty products and home furnishings, announced the
departure of its CFO, Michael Dastugue. Michael Kramer will be
replacing him as the interim CFO of the company.
In a separate story, the company updated its transformation plan
where it aims to simplify the operational structure, which will
expectedly pave the way for positive earnings growth and boost
shareholder's value.
J. C. Penney has been busy transforming the way it operates.
With its new pricing strategy, fresh logo, strategic merchandise
initiatives, reduction in costs, enhancement of shopping experience
and customers shopping at their own terms, the company is working
hard to simplify its operational structure.
The idea is to augment sales and enhance productivity at stores,
which in-turn will lead to margin expansion. The company aims to
reduce costs by $900 million in the first couple of years of its
transformation, resulting in lowering the expenses below 30% of
sales. Moreover, the company targets expenses to be 27% of sales by
the end of the transformation process.
Specifically, the company will abridge significant amount of
costs from stores and advertising and from operations at its home
office. Following the rationale, J. C. Penney announced the
realignment of its management structure and restructuring of its
workforce at its headquarters in Plano, Texas.
J. C. Penney is trying every means to tide over a distressed
economy. The company entered into a strategic alliance with
Martha Stewart Living Omnimedia Inc.
(
MSO
) to uplift itself. It is betting hard on Martha Stewart to be a
fortune changer.
In October, J. C. Penney entered into an asset buyout agreement
with
Liz Claiborne Inc.
(
LIZ
). Per the deal, J. C. Penney acquired the global rights for the
Liz Claiborne portfolio of brands and the U.S. and Puerto Rico
rights for Monet, a fashion jewelry brand, for $267.5 million.
These moves are expected to increase sales and improve traffic
for the company. We remain optimistic and believe that these
measures will definitely pave the way for continued growth and
innovation.
Currently, J. C. Penney retains a Zacks #3 Rank, which
translates into a short-term Hold rating. Moreover, considering the
company's fundamentals, we have a long-term Neutral
recommendation.
PENNEY (JC) INC (
JCP
): Free Stock Analysis Report
LIZ CLAIBORNE (
LIZ
): Free Stock Analysis Report
MARTHA STWT LIV (
MSO
): Free Stock Analysis Report
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