- The Washington Times - Friday, January 10, 2003

PLANO, Texas, Jan. 10 (UPI) — J.C. Penney Co. Inc. said Friday it plans to slash 2,000 jobs and take about $40 million in charges in 2003 as it restructures its catalog business.

The retailer also said it will close its Atlanta catalog center and telemarketing offices in Atlanta and Lenexa, Kan.

The restructuring is expected to save $30 million, or 7 cents a share, annually, J.C. Penney said.

The retailer said it would take charges of about $40 million before taxes, or 10 cents a share, in 2003.

"Our goal is to have a substantial and profitable catalog and Internet business, with an appropriately sized infrastructure that will support current and future business needs," said Allen Questrom, chairman and chief executive officer.

He said over the past two years, catalog had made significant strides in improving its profit contribution by eliminating unprofitable sales, improving inventory management and reducing expenses.

"Our catalog turnaround strategy has reduced the square footage devoted to catalog fulfillment centers by approximately 40 percent, including space redeployed to our new store support center network," he said.

He said the company had also eliminated some outlet stores and telemarketing centers.

"We believe these measures, coupled with a rapidly expanding Internet business, will further enhance profitability, improve cash flow, and lead to future growth," he said. "The turnaround of department stores is well underway, and these actions will strengthen our direct to consumer business, uniquely positioning JCPenney as a three-channel retailer."

The retailer said it expects all facilities affected by the restructuring plan to close by the end of the second quarter of 2003. Approximately 2,000 full and part-time employees will be affected.

J.C. Penney currently employs approximately 250,000 workers and operates 1,061 department stores throughout the United States, Puerto Rico and Mexico, and 54 Renner department stores in Brazil.

Its Eckerd Corp. unit operates 2,656 drugstores throughout the Southeast, Sunbelt, and Northeast regions of the country.

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