Penney to cut 2,000 jobs, close two Atlanta facilities

PLANO, TEXAS - J.C. Penney Co. said Friday that it will cut about 2,000 jobs and close three facilities in its catalog business, whose sales have fallen sharply over the past year. <br> <br> Penney said it would close a catalog-fulfillment center in Atlanta and telemarketing centers in Atlanta and Lenexa, Kan., by the end of the second quarter. <br> <br> A Penney spokesman said about 800 jobs at the Atlanta fulfillment center were mostly full-time and most of the roughly 700 jobs at the two call centers were part-time. <br> <br> The remaining job cuts would be spread across four other fulfillment centers and 10 call centers, he said. Penney said it has about 250,000 employees. <br> <br> Sales at Penney&#39;s department stores were better than expected in December, as sales at stores open at least a year rose 4.7 percent from a year earlier. But the catalog division continued to slump, with sales dropping 23.7 percent from a year earlier. <br> <br> The company has reduced the size of its Big Book catalog and junked several unprofitable specialty catalogs. <br> <br> The restructuring of the catalog business will result in pretax charges of about $40 million, or 10 cents per share, in the first half of this year, the company said. The charges might be partially offset by related real-estate sales, it said. <br> <br> Penney said the moves would save about $30 million, or 37 cents per share, annually beginning in 2004. <br> <br> Friday&#39;s moves were the latest in a series of cutbacks in the catalog division. By the end of summer, Penney will have closed 17 outlet stores and four telemarketing centers since January 2000. <br> <br> Chairman and chief executive Allen Questrom, hired in September 2001, said the catalog division has improved its contribution to Penney&#39;s profits by eliminating unprofitable sales and cutting costs. <br> <br> Questrom said cutbacks in the catalog unit, combined with rising sales on the company&#39;s Web site, will further improve profits and cash flow. <br> <br> Penney operates about 1,060 department stores and 2,600 Eckerd drug stores. <br> <br> In midday trading Friday on the New York Stock Exchange, Penney shares fell $1.10, or 4.5 percent, to $23.48.

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