J.C. Penney’s Net Income Down 78%

J.C. Penney Co. saw total third-quarter sales drop 3.2%, to $4.17 billion, compared to $4.31 billion for the same period in 2008. Net income sank 78%, to $27 million from $124 million for the third quarter last year. For the three months ended Oct. 31, the general merchant’s same-store sales decreased 4.6%.

It sounds bad, but chairman/CEO Myron E. Ullman III said in a release that results reflect Penney’s success with its strategy to balance top line performance with bottom-line profitability.

“Our ability to deliver earnings above original expectations resulted from better than expected improvement in gross margin as we have maintained appropriate inventory levels and reduced both clearance selling and unprofitable discounting,” Ullman said.

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J.C. Penney’s New Line Speaks to Younger Women

Multichannel general merchant J.C. Penney is targeting a younger demographic with the launch of She Said, a contemporary career sportswear brand geared to professional women. This new private brand,¬ designed, developed and sourced inhouse,¬ is now available at J.C. Penney stores, online at jcp.com and via catalog.

She Said, which J.C. Penney says is named for “the girl in the know,” is designed to appeal to younger customers by offering “cutting-edge style and quality at affordable prices,” according to a company statement. Collection items range in price from $26-$44 for tops, $44-$50 for pants, $44-$58 for dresses, $44 for skirts, and $68-$85 for jackets.

The line joins the Penney’s growing roster of contemporary exclusive brands including Bisou Bisou, I “Heart” Ronson, Allen B., Oxford & Regen, and Twelfth of Eleven. These brands are available on the J.C. Penney Website under a new contemporary lifestyle tab via the women’s category.

The company will expand the contemporary lifestyle tab in October to include a robust site that will allow customers to mix and match pieces, search for pieces by designer or category and share looks with friends via Facebook. The enhancements will provide “more innovative ways to interact with the merchandise and other customers,” says Penney spokesperson Jayme Cudworth.

The merchant will also mail a 44-page specialty “Little Red Book” catalog on Sept. 16 that will highlight a variety of styles from Penney’s contemporary lifestyle assortment, says Cudworth. She would not reveal the circulation but said the catalog would go to the company’s online and in-store customers; another 44-page Little Red Book will mail Nov. 29.

Neil Stern, a retail analyst and senior partner for retail consultancy McMillan Doolittle, says this new collection bodes well for J.C. Penney. The cataloger/retailer clearly needs to continue to move the business forward as the economy will eventually recover, he says; going after a younger, more modern customer base makes sense.

What’s more, Stern says, “the product looks great, and J.C. Penney is very experienced in creating and launching private brands.”

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J.C. Penney’s Net Income Down 50%

The final quarter and full year 2008 results are in for J.C. Penney Co., and they aren’t pretty. Fourth-quarter sales for the general merchant decreased 9.8%, to $5.75 billion, compared to $6.39 billion last year. Same-store sales slipped 10.8% for the period ended Jan. 31, 2009. Net income shrank nearly 51%, to $211 million, down from $430 million in the fourth quarter last year.

The Plano, TX-based company said in a release that its weakest results were in the fine jewelry category, and from the Southeast region.

Results for the full year weren’t much better. J.C. Penney’s sales fell 6.9%, to $18.48 billion, down from $19.86 billion. Net income dropped 48.5%, to $572 million, compared to $1.11 billion last year.

“Throughout the year, we took steps to significantly reduce our inventories and operating expenses in order to withstand the impact of the economic conditions,” said Penney chairman/CEO Myron E. (Mike) Ullman III in the release. “ At the same time, we stepped up the style we offer and focused on effectively communicating the newness, excitement and value in our merchandise, as well as engaging and enabling our associates to provide a rewarding shopping experience to our customers.”

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