J.C. Penney to cut 2,000 jobs, close 33 stores

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NEW YORK — Struggling department-store operator J.C. Penney announced it will cut 2,000 jobs and close 33 stores as it tries to get back to profitability.

The news raises concerns that Penney's holiday season sales were not what the company hoped for and that the chain needs to do even more to recover from a disastrous turnaround plan.

J.C. Penney Co., based in Plano, Texas, said earlier this month that it was pleased with its holiday results but declined to give sales figures, raising worries among Wall Street analysts about how the season actually fared.

The cuts announced Wednesday should save more than $65 million annually. The company will take $26 million in pretax charges in the third quarter and $17 million in future quarters. Penney has 116,000 employees and operates more than 1,100 stores. All the job cuts are related to the store closings. No stores in Oregon or Washington were among those to be shuttered.

The holiday season is crucial since it can account for anywhere from 20 percent to 40 percent of a retailer's annual sales. But at J.C. Penney, the stakes are higher.

Penney is trying to recover from massive losses and plummeting sales under former CEO Ron Johnson, who was ousted in April after being on the job for 17 months. The company then brought back former CEO Mike Ullman.

Penney has since reinstated the frequent sales events that Johnson ditched. It also restored store brands such as St. John's Bay, which were phased out in a bid to attract younger, more affluent shoppers.

Penney had been releasing monthly sales figures in the last few months which showed improvement. Sales at stores open at least a year edged up 0.9 percent in October -- the first increase since December 2011. Last month, the company said revenue at stores open at least a year jumped 10.1 percent in November, helped by a strong start to the holiday season.

But on Jan. 8, it offered no figures regarding December sales when it came out with a brief release to update investors on its holiday performance. It said that it was "pleased with its performance for the holiday period," and that the holiday season showed "continued progress in its turnaround efforts."