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PIANO, TEXAS -- JCPenney has launched an ambitious plan to halt lagging department store sales by focusing its efforts this year on appealing to core customers.
At the company's recent annual shareholders meeting, the retailer laid out other plans to raise profitability such as expanding e-commerce, outsourcing its credit card operation and offering an IPO of 20% of its Eckerd drugstore division's tracking stock.
Altogether, the multifaceted approach should increase revenue and save the company $125 million through business synergies, said ceo James Oesterreicher.
JCPenney reported 1998 revenue rose slightly to $30.7 billion, which boosted earnings 4.9% to $594 million, although department stores sales fell 2% to $19.3 billion. First quarter results show department store sales roughly the same as a year ago, while companywide revenue grew 7.3% to $7.6 billion.
"We realize our performance in department stores needs further improvement. We have adopted and are implementing an aggressive action plan with a strong sense of urgency to create value for you," Oesterreicher told shareholders.
The transformation of JCPenney's 1,148 department stores into retail outlets that appeal to two groups of target customers-- the "modern spender" and "the starting out"-has already begun. Modern spenders are part of a dual-income household, ages...