JC Penney Company, Inc. (NYSE:JCP) [Detail Analytic Report] faced an expense challenge in last month and in response slashed payroll, froze overtime for its employees and took other cost-reduction steps, Reuters reported, citing an internal memo. According to memo, they have an expense challenge for the month of April and are asking all stores to do their fair share by closely monitoring all expenses. Employees were stunned when their hours were cut on such short notice, one source stated. The reduction in employee hours saved Penney about 800 hours over two weeks or about $8,000 per store.
Employees expect cut hours in the slow months of January and February but not in last month, stated one employee, who didn’t want to be identified. When the quarterly figures are announced, they don’t represent the financial struggles and low morale of the thousands of associates firm-wide. The firm plans to release its Q1 financial results on May 13. JC Penney declined to comment.
Both part and full time employees had their hours reduced. Those who typically work 25 hour a week got cut to 10 or 15 hours. The temporary cost reduction also included the use of corporate credit cards, and markdowns were banned, the memo reported. The firm has been working to turn around its business under Marvin Ellison, its Chief Executive, who came on board in August 2015. It stated in February it expects to announce its first annual profit in 5 years in 2016.
Abercrombie & Fitch Co. (NYSE:ANF) [Detail Analytic Report] reported that Jonathan Ramsden has informed the firm that he plans to step down as Chief Operating Officer and resign from the firm effective June 15, 2016. At that time, Ramsden’s responsibilities will be assumed by other members of the Office of the Chairman which, in addition to Ramsden, include Arthur Martinez, Executive Chairman; Fran Horowitz, President and Chief Merchandising Officer; Joanne Crevoiserat, Executive VP and Chief Financial Officer; and John Gabrielli, Senior VP of Human Resources.
Martinez commented that the Board and he are grateful for Jonathan’s contributions to Abercrombie & Fitch during the previous seven years, which have helped position the firm for future profitable growth. They wish him all the best as he prepares to move into a new chapter in his life and career. Ramsden stated that he has a strong attachment to Abercrombie & Fitch and to the fantastic group of people he works with every day.
Ramsden added the decision to leave was a very difficult one, but he knows that the firm is in the hands of an outstanding leadership team and that they have built a strong bese for growth and success. He looks ahead to working with his colleagues during the coming several weeks to ensure a smooth transition. Ramsden joined Abercrombie & Fitch as Executive VP and Chief Financial Officer in December 2008 and has been the Firm’s Chief Operating Officer since January 2014.
Bebe Stores, Inc. (NASDAQ:BEBE) [Detail Analytic Report] announced its fiscal third quarter loss of $30 million. Bebe Stores reported that it had a loss of 37 cents. Losses, revised for non-recurring costs and severance costs, came in 21 cents a share. The clothing retailer declared revenue of $79.9 million in the quarter. Bebe expects full-year earnings to be 8 to 12 cents a share.
Manny Mashouf, Chief Executive Officer of the firm commented that during the period, they took significant steps to restructure their operations which included headcount cuts, and the closure of non-productive stores. Their Q3 results were impacted by the costs they incurred in connection with these efforts. As of the end of the period, they have eliminated 86 corporate positions with an anticipated annual savings of about $9.0 million.
Mashouf added going into the Q4 they are continuing to move forward with their strategy of streamlining the production cycle for their product, improvements to the assortment within each of their stores, further rationalization of the store fleet, and continued focus on discretionary spending. In addition, they are evaluating several different channel expansion opportunities as well as evaluating several potential sources of liquidity through the leveraging of their assets.