Penney’s closes more stores

NEW YORK — J.C. Penney is closing more stores following a weak holiday sales season for the retailer. Net income tumbled nearly 70 percent, and a key measure for health dropped 4 percent in the fourth quarter, the most crucial period of the year for retai

Changes under new CEO

The company did top expectations for the fourth-quarter results and under new CEO Jill Soltau, the department store rid itself of unprofitable inventory and said it will have positive free cash flow this year.

Shares jumped more than 23 percent Thursday.

Soltau, who came on board in October, faces numerous challenges in avoiding the fate of Sears or other retailers that have filed for bankruptcy protection, or vanished.

Soltau jettisoned major appliances which accounted for 2.7 percent of J.C. Penney’s sales last year, but dragged on the company’s operating profit.

Renewed focus

It’s focusing instead on women’s clothing, and goods for the home like towels or bedsheets, which carry higher profit margins. Furniture is still available, but only online.

That reverses the course followed by predecessor Marvin Ellison, who three years ago began selling major appliances again in an attempt to capitalize on problems at Sears.

In a conference call Thursday, Soltau said she has spent time with customers, suppliers and workers, and she said she’s convinced the company can establish a path of “sustainable profit growth.”

Changes will be swift, methodical and based on what customers want and expect from J.C. Penney, Soltau said. “This is not business-as-usual,” she said during a conference call Thursday. “Our current reality is clear.”

Crisis for iconic brands

Department stores like J.C. Penney are trying to reinvent themselves in an era when Americans are buying more online, or turning to discounters like T.J. Maxx for clothing.

Bringing back shoppers is has proven exceedingly difficult, even for iconic brands.

Momentum appears to be slowing at Macy’s, which released fourth-quarter results this week. It reported weaker profit and total sales, as well as meager growth in sales at established stores, a key measure for a retailer’s health.

Nordstrom posts earnings late Thursday and Kohl’s reports next week.

MARY ALTAFFER / ASSOCIATED PRESS Department stores such as J.C. Penney are trying to reinvent themselves in an era when Americans are buying more online, or turning to discounters such as T.J. Maxx for clothing.