The Great Restructuring in retail continues. In the wake of a disappointing holiday season, J.C. Penney (JCP) said recently that it will close 138 stores stores by the second quarter. The store closures represent 13% to 14% of the company's current store base and less than 5% of annual sales. They have a negligible impact on net income. J.C. Penney said same-store sales at the locations were "significantly below" the remaining store base and operate at a much higher expense rate due to poor productivity. The company expects $200 million in annual costs savings from the efforts. "We believe closing stores will also allow us to adjust our business to effectively compete against the growing threat
Payless Inc., the struggling discount shoe chain, is preparing to file for bankruptcy as soon as next week, according to people familiar with the matter. The company is initially planning to close 400 to 500 stores as it reorganizes operations, said the people, who asked not to be identified because the deliberations aren’t public. Payless had originally looked to shutter as many as 1,000 locations, and the number may still be in flux, according to one of the people. Payless’s bankruptcy would add to a tumultuous year in retail, with several bankruptcies and hundreds of store closings -- even at companies that aren’t distressed. The industry is racing to try to adapt to more online purchasing
Oil prices slipped on Wednesday to their lowest since late November, with Brent testing the $50 per barrel support, after data showed record high U.S. crude inventories rising faster than expected, raising doubts over the viability of OPEC-led output cuts. The Energy Information Administration (EIA) said U.S. inventories climbed almost 5 million barrels to 533.1 million last week, far outpacing forecasts of a 2.8 million-barrel build. "The fact that this supply has increased almost 55 million barrels this year in the face of significant OPEC production cuts is evolving as a major bearish development that poses a significant threat to the viability of the OPEC agreement in our opinion," Jim Ritterbusch, president of Chicago-based energy advisory firm Ritterbusch & Associates, said in a note.