J. C. Penney Company Inc. (JCP), a leading retailer of apparel and footwear, accessories, fashion jewelry, beauty products and home furnishings, recently reported sales results for the four-week period ended October 29, 2011. The company’s comparable-store sales for October inched down 2.6% with total sales plummeting 6.6% to $1,186 million.
During the period under review, The Plano, Texas-based J. C. Penney registered comparable-store sales growth across women's attire and accessories, with the southeast region recording maximum sales.
The company witnessed a 1.6% decline in comparable-store sales for the third quarter of 2011 with a decrease of 4.8% in total sales to $3,986 million. The company’s comparable-store sales for the thirty-nine week period inched up 1.2%. However, total sales came down by 1.8% to $11,835 million.
In October 2011, J. C. Penney, which competes with Macy’s Inc. (M) and Kohl’s Corporation (KSS), sold 15 outlet stores to SB Capital Group, an associate of the Schottenstein family of companies, as a part of its strategy to exit the outlet store business by the end of 2012.
Columbus, Ohio-based SB Capital Group hinted that the stores acquired will undergo a complete makeover and will operate under a new banner, JC’s 5 Star Outlet. The transition to a new retail brand will take place in approximately 21 months, till then the stores will continue to operate as JCPenney Outlet Stores. The stores will continue to receive merchandise from J. C. Penney as of now.
The impressive part of the deal was the retention of all the existing 1,600 employees of the JCPenney Outlet Stores by the new retail entity, at a time when the nation is grappling with high unemployment, which is currently hovering around 9%.
Currently, we have a long-term ‘Neutral’ recommendation on the stock. However, J. C. Penney holds a Zacks #4 Rank that translates into a short-term ‘Sell’ rating, reflecting the company’s dismal October sales results.
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