JCPenney Inc. has reported doubled losses in its first quarter, sinking from losses of $163 million between February to May of 2012, to losses of $348 million in the same three months of 2013. If the company continues to lose money at its current rate, analysts predict the ailing department stores will be bankrupt by Labor Day.
JCPenney execs attribute $72 million of their first-quarter losses to “restructuring and management transition charges. Poor sales and last-minute, bottom-of-the-barrel clearance sales are apparently responsible for the remaining $289 million. Sales fell 16.4%, down to $2.64 billion from $3.15 billion in 2013; comparable store sales were down a slightly higher 16.6%.
Investors hoped that CEO Ron Johnson’s departure, and subsequent replacement by former CEO Mike Ullman in April would revitalize the department store; this week, Ullman told press to be patient.
“Our objective is to put JCPenney back on a path to profitable growth,” he said, adding that JCPenney’s primary focus will be on reconnecting with customers through new attractions, staple brands, loyalty programs, and promotions.
Ullman admitted that there is “a good deal of work ahead,” but asserted that by “listening to our customers and providing the shopping experience they want, we are confident we will deliver for them and improve performance for the benefit of our suppliers, associates and shareholders.”