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RAPAPORT... J. C. Penney Company Inc. reported a loss of $985 million, or $4.49 per share, for the year that ended on February 2, 2013. Revenue fell 25 percent year on year to $12.99 billion, which even included an extra week of receipts of $163 million. Same-store sales declined 25.2 percent for the year and Internet sales through jcp.com plummeted 33 percent to $1.02 billion. JCPenney's gross margin in 2012 was 31.3 percent of sales, compared with 36 percent one year ago. JCPenney incurred a charge of $148 million, or 41 cents per share, related to lump-sum settlements from its primary pension plan to participants who have separated from the retailer. It realized net gains on the sale or redemption of non-operating assets of $397 million and recognized charges totaling approximately $86 million, or 24 cents per share, related to the impairment and write-off of certain store and store-related assets. JCPenney incurred $298 million, or 83 cents per share, in restructuring and management transition charges, which included $109 million for home office and stores, $78 million for store fixtures, $41 million for management transition, $36 million for software and IT systems, $19 million for the supply chain and $15 million for other expenses. However, the company reduced its debt by $250 million in 2012, ending the year with $930 million in cash and cash equivalents. During the first half of 2013, JCPenney anticipates opening about 20 shops designated for home products in 505 stores with brand partners such as Michael Graves, Jonathan Adler and Sir Terence Conran, among others. In addition to transforming the home area, the company will open nearly 700 Joe Fresh apparel shops on March 15, as it transforms nearly 11 million square feet of retail space and add 60 ''Sephora inside jcpenney'' stores, bringing the total to 446.
Ron Johnson, JCPenney's CEO, said, "Sales and customer traffic were below our expectations in 2012, but as we execute our ambitious transformation plan, we are pleased with the great strides we made to improve JCPenney's cost structure, technology platforms and the overall customer experience. We have accomplished so much in the last 12 months. We believe the bold actions taken in 2012 will materially improve the company's long-term growth and profitability. "Looking ahead, we are energized by our shop roll out plans for 2013 and the exciting work our teams are undertaking to transform the store. Combining a new marketing campaign focused on style and value, incredible new brands and updated merchandise, with continued enhancements to the customer experience both in our stores and on jcp.com, we are working towards reconnecting with our core customer while attracting new customers to JCPenney," he said.
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