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BUSINESS A25
Saturday 15 August 2015
J.C. Penney’s 2Q results show turnaround gaining traction
ANNE D’INNOCENZIO Johnson. That led to mas- A car drives through an empty JC Penney department store parking lot at the Hanover Mall in
AP Retail Writer sive losses and plummeting
PLANO, Texas (AP) — J.C. sales. Hanover, Mass. J.C. Penney Co. reported positive quarterly financial results on Friday, Aug. 14,
Penney’s turnaround is Ellison took over the top job
gaining traction. from Myron Ullman, who 2015, evidence that the retailer’s turnaround is gaining traction. (AP Photo/Stephan Savoia)
The department store became executive chair-
chain said Friday that its man of the board. Ullman, November 2011. earnings call with inves- ping up department store
losses narrowed in the who had previously run the Now, Ellison is being tasked tors Friday, such as Penney peers that cater to mid-
second quarter on better- company, came back as to pump up sales growth not using analytics when it dle-income shoppers who
expected sales, fueled by CEO in 2013 after Johnson by sprucing up some de- comes to pricing. He also haven’t been benefiting
men’s clothing, fine jew- was pushed out. Ullman partments like jewelry and said its customer loyalty much from the economic
elry and the beauty brand helped pick Ellison, and the dramatically expanding program “isn’t very good.” recovery.
Sephora. And a key rev- two executives have been online sales after falling be- And it needs to get better Shoppers’ spending is also
enue measure rose for the running the company to- hind rivals. He also wants in replenishment and one- shifting away from depart-
third straight quarter. gether since last Novem- to transform the company on-one marketing. ment-store specialties such
Shares of the company ber. into a more efficient op- On top of its own woes, as clothing and more to-
rose nearly 5 percent in af- But J.C. Penney still has an erator. Ellison spelled out Penney is facing broader ward restaurants, autos
ternoon trading. uphill road to a full recov- a litany of problems in an challenges that are trip- and smartphones.q
“Although there is much ery.
work to do ... it’s clear that Ullman stabilized the busi-
when we execute well, we ness by restoring frequent
can deliver profitable sales discounts and bringing
and take market share,” back basic merchandise
said Marvin Ellison, a for- and popular store brands
mer Home Depot execu- that Johnson eliminated.
tive who took over as CEO But sales are still well below
on Aug. 1 and presided where they were before he
over his first earnings call took over, and the retailer
for Penney. continues to rack up losses,
The results offer encour- though they’re shrinking.
aging signs for the Plano, In the latest fiscal year end-
Texas-based retailer, which ed January 2015, annual
is more than two years sales were $12.25 billion,
into an effort to recover far below the $17.2 billion
from a disastrous attempt level in the fiscal year that
to reinvent itself under for- ended in January 2012.
mer Apple executive Ron Johnson became CEO in
US factory output climbed in July, lifted by auto production
A worker helps assemble a helicopter at the AgustaWestland’s aircraft manufacturing facility, tepid economic growth ductivity at machinery
abroad and lower oil pric- plants.
in Philadelphia. Auto plants, clothing makers and plastics factories drove a sharp rebound in es, which have led energy Some analysts suggested
companies to slash their that the gains in auto pro-
U.S. manufacturing in July, according to industrial production figures released by the Federal orders for equipment and duction weren’t as impres-
pipelines. sive as the numbers might
Reserve, Friday, Aug. 14, 2015. (AP Photo/Matt Rourke) “Industrial production is indicate. Jesse Hurwitz at
turning around after weak- Barclays Research noted
JOSH BOAK U.S. manufacturing in July. had dipped 0.3 percent in ness in early 2015,” said Stu- that auto plants generally
AP Economics Writer U.S. factory production June, the Federal Reserve art Hoffman, chief econo- close temporarily in July to
WASHINGTON (AP) — Auto climbed a seasonally ad- said Friday. The gains sug- mist at PNC Financial Ser- retool for new model lines
plants, clothing mak- justed 0.8 percent last gested that manufacturers vices. and that the shutdown
ers and plastics factories month after a revised esti- are adjusting to the ob- Much of the improvement this year was shorter than
drove a sharp rebound in mate showed that output stacles of a stronger dollar, came from motor vehicle normal. This would mean
output, which surged 10.6 that the Fed report exag-
percent in July. Auto sales gerated the gains in motor
jumped 5 percent to 1.5 vehicle output last month
million, with luxury brands and that auto production
such as Acura, Audi, In- might dip in August.
finiti, Lincoln and Volvo ac- The Federal Reserve said
counting for double-digit overall industrial produc-
gains. tion — which includes not
Output at clothing and only the key category of
leather factories rose 1 manufacturing but also
percent last month, as did mining and utility output—
the manufacturing of plas- rose 0.6 percent. Mining,
tics and rubber products. which includes oil and gas
Some of those gains were wells, rose 0.2 percent last
offset by reduced output month but remains down
by oil and coal refiners, as 2 percent over the past 12
well as by a drop in pro- months.q
