62.2 F
Fort Worth
Thursday, November 26, 2020
Business JC Penney sees improving sales

JC Penney sees improving sales

Other News

Left for dead, twice, RadioShack gets another shot online

SILVER SPRING, Md. (AP) — RadioShack, a fixture at the mall for decades, has been pulled from brink of death, again. It’s the most prized...

JC Penney sees bankruptcy protection exit by Christmas

NEW YORK (AP) — J.C. Penney believes it will emerge from bankruptcy protection before Christmas under a new ownership agreement that would save tens...

Petalo, not Charmin: Virus brings Mexican toilet paper to US

By JOSEPH PISANI AP Retail Writer NEW YORK (AP) — Toilet paper is back on store shelves. But you may not recognize some of the...

Mall owners close to buying JC Penney out of bankruptcy

By ANNE D'INNOCENZIO AP Retail WriterNEW YORK (AP) — Mall owners Simon Property Group and Brookfield Property Partners are close to a deal to...
Robert Francis
Robert is a Fort Worth native and longtime editor of the Fort Worth Business Press. He is a former president of the local Society of Professional Journalists and was a freelancer for a variety of newspapers, weeklies and magazines, including American Way, BrandWeek and InformatonWeek. A graduate of TCU, Robert has held a variety of writing and editing positions at publications such as the Grand Prairie Daily News and InfoWorld. He is also a musician and playwright.

ANNE D’INNOCENZIO, AP Business Writers MICHELLE CHAPMAN, AP Business Writers

NEW YORK (AP) — Shares of J.C. Penney Co. got a boost Tuesday after the struggling department store chain said that a key sales barometer improved in September from August and it expects that it will have ample liquidity at year end.

Penney, based in Plano, Texas, said that revenue at stores opened at least a year fell 4 percent in September from a year ago, but that was a 5.8 percentage point improvement from August.

The retailer also said that its online sales continue to strengthen. Online sales rose 25.3 percent last month compared with a year ago. That follows a 10.8 percent gain in August. For the third quarter-to-date, online sales are up 18.6 percent.

Penney said that it expects to see improving sales trends for the remainder of the year. Revenue at stores open at least a year is a key gauge of a retailer’s health because it excludes the potentially distorting effect of results from stores recently opened or closed.

Its shares rose more than 5 percent in morning trading.

The retailer is trying to recover from a failed turnaround attempt spearheaded by former CEO Ron Johnson. Two weeks ago, the company said it planned to sell up to 96.6 million shares of common stock in a public offering, evidence the chain is looking to shore up its cash reserves ahead of the crucial holiday shopping season.

J.C. Penney Co. said Tuesday it anticipates more than $2 billion in year-end liquidity — a measure of its ready access to cash — after closing on a public stock offering of 84 million shares. The company said that the offering resulted in about $785 million in net proceeds. It also said Tuesday that it remains current in vendor payments

Penney’s board ousted Johnson in April after 17 months on the job and rehired the previous CEO, Mike Ullman. Under Ullman, Penney is bringing back frequent sales events that had been ditched and is restoring basic merchandise eliminated by Johnson in a bid to attract more affluent, younger shoppers. Under Johnson, the company brought in trendy names like Betsey Johnson and focused on every day prices, eliminating hundreds of sales.

“Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business in spite of what continues to be a difficult environment for consumers and retailers in general,” said Ullman in a statement.

Still, Ullman cautioned the company is still in the early stages of the turnaround.

Penney said that the improvement in sales at both its stores and online in September from the prior-year period was due to better inventory levels in key items and having the sizes its shoppers want. However, while traffic improved at its stores not located in malls during September’s last two weeks, Penney said that its mall stores are still contending with weak traffic levels.

Penney noted that its profit margins continue to be hurt by heavy promotions to get rid of the overhang of inventory from the first two quarters of the year.

Meanwhile, Penney noted that fixing the new home departments has been more challenging than originally planned.

Under Johnson, Penney had overhauled its home areas in about 500 of the 1,100 Penney stores, bringing in such new names as Jonathan Adler and Michael Graves. The home areas were reopened in May. But Penney said in August that the overhauled home areas have been weak. Penney is now working to have a more balanced mix of modern and traditional home furnishings at better price points and making the shopping layout easier for shoppers.

Penney said Tuesday that it has reopened “all but a handful” of its 505 new home departments. But home sales are still weak at its stores.

Also on Tuesday, Sterne Agee analyst Charles Grom downgraded Penney’s rating to “Hold” from “Buy” and cut its price target in half, to $9 from $18. Groms said in a client note that he fears former CEO Johnson may have permanently turned off the retailer’s core customer.

Ullman said Tuesday that reconnecting with customers and getting them into stores is a top priority for the chain.

“We are all dedicated to continuing the momentum underway and restoring J.C. Penney to a leadership position in American retail. It will take time, but we are on the right path with a sound strategy and achievable goals,” he said.

The company is slated to report its fiscal third-quarter results next month.

Its shares rose 40 cents, or 5.2 percent, to $8.11 in morning trading. Shares have lost 82 percent of their value since early February of 2012 when investor enthusiasm was high about Johnson’s turnaround plan. Since the beginning of this year, shares have been down 61 percent.  


Oh hi there 👋
It’s nice to meet you.

Sign up to receive awesome content in your inbox.

We don’t spam! Read our privacy policy for more info.

Latest News

Several local Walmart Supercenters remodeled in time for holidays

Fort Worth and Arlington residents will soon get a first look at the newly remodeled Walmart Supercenters at 9500 Clifford Street, 8401 Anderson St....

Retail trade group sees solid holiday sales despite pandemic

By ANNE D'INNOCENZIO AP Retail Writer NEW YORK (AP) — The National Retail Federation, the nation's largest retail trade group, expects that holiday sales could...

Grapevine company acquires San Antonio family business

Grapevine-based Able Machinery Movers, a heavy machinery-moving and rigging company, announced Nov. 24 the acquisition of Diamond E Rigging, a family-owned rigging and heavy equipment relocation business...

Arlington firm designing new hotel in Las Colinas

Arlington-based Type Six Design & Development has announced the firm has received zoning approval from the City of Irving for a new six-story Hotel...

New ownership at WineHaus

WineHaus Fort Worth announced a change in ownership and updates to the popular wine bar located at 1628 Park Place Ave. New owners Robyn Davis...