- Last Updated: 2:07 PM, February 6, 2013
- Posted: 11:23 PM, February 5, 2013
Post photo composite
JCPenney CEO Ron Johnson is getting ready to break more hearts at headquarters — a few hundred more.
In what some Penney insiders are calling the “St. Valentine’s Day Massacre,” the former Apple exec plans this month to fire at least 10 percent of the remaining 3,000 employees at the retailer’s home offices in Plano, Texas, sources told The Post.
While the bloodbath was originally targeted for last month, sources said Johnson opted to delay it until after the flailing company’s fiscal year ended last week.
“They wanted to throw the severance costs into this year because last year was already so bad,” according to one former exec. He noted that fourth-quarter sales — scheduled to be released on Feb. 27 — are estimated to have dropped upward of 30 percent amid heavy holiday markdowns.
“The real reason is that they’re running low on cash,” according to another source.
Penney finished the third quarter with $525 million in cash — half of what it had a year earlier.
JCPenney officials didn’t respond to a request for comment yesterday.
Johnson is in a fix, as plummeting sales are sapping funds he needs to build in-store shops for a slew of fashionable clothing brands — including Joe Fresh, Betsey Johnson and Marchesa.
A few shops that were slated to be rolled out this spring, like Dockers and Martha Stewart, are facing delays into the second quarter, sources said.
Bringing more-appealing brands to Penney has been a key initiative for Johnson as he looks to attract younger customers and shed the aging chain’s dowdy image.
With Johnson emphasizing brands, the upcoming job casualties, sources said, will be most severe among workers who produce Penney’s private brands.
Upward of 200 designers and product-development specialists in that unit are slated for pink slips.
Before Johnson took the helm in late 2011, private-label goods — from women’s, men’s and kids’ clothing to home fabrics and furnishings — accounted for nearly half of Penney’s business.
Johnson aims to slash that to 25 percent or less. While Penney’s Arizona denim brand is ceding floor space to Levi’s and Buffalo jeans, its St. John’s Bay clothing label has been quietly wound down.
Critics fret that private label has been a more profitable business for Penney, offsetting lower margins on established brands such as Levi’s and Izod.
“Private label is what made it possible to have those other brands in the store in the first place,” according to an executive at a major Penney supplier.
Heads continue to roll as Johnson scrambles to deliver on his promise to slash $900 million in costs by the end of 2013.
That figure included $200 million in savings at HQ. Last April, 600 workers there got axed, followed by an additional 350 in July.
Many of the workers cut during last year’s layoffs were “a lot of people sitting around doing nothing,” according to one former employee,.
This month’s cuts, however, will hit once-profitable areas where “people who really did their jobs in a good way,” the source said.