JCPenney 2008 Annual Report Download - page 5

• capitalizing on our jTime workforce management system, which
allows us to match store stafng levels with expected trafc,
and generate signicant expense savings.
• implementing even stronger expense discipline throughout
our business by thoroughly analyzing processes across the
Company to eliminate unnecessary costs.
• modifying our store opening plans, while improving our existing
locations. In 2008, we incurred capital expenditures of just
under $1 billion, which we used towards opening 35 new or
relocated stores, primarily in our off-mall format. We also
completed signicant xturing and store environment
improvements in about 600 stores across the country, as well
as 24 major renovations and 90 store refurbishments.
For 2009, we have reduced our capital spending expectations
to $600 million, which includes plans to renovate approximately
15 stores and relocate or open 17 additional stores, including
our rst location in Manhattan, in one of the country’s busiest
shopping areas. Additionally, we will continue to make
improvements in our store environment as we open more
Sephora inside JCPenney locations in the center core of our
stores, and plan for new merchandise xturing to support
apparel and home brand launches.
Our Vision Remains Intact: To Be the Preferred
Retail Choice for America’s Families
While the current economic climate is making the path longer, we
have not lost sight of our vision to be the preferred retail choice
for America’s families.
As we work to achieve this, my sincerest appreciation goes to our
Associates for the care, commitment and enthusiasm they bring
to work every day. I also want to thank our Board members for
their solid judgment, intense focus and willingness to share the
benets of their experience. Finally, to our stockholders, thank
you for your continued support. We are committed to making
JCPenney a rewarding investment for you.
Myron E. (Mike) Ullman, III
Chairman of the Board and Chief Executive Ofcer
April 2009
5
Empowering Our ASSOCIATES
Customer service is a key differentiator for JCPenney, and our
Associates are the “front line” in delivering that service. Central to
JCPenney’s approach is ensuring that our Associates are deeply
engaged in their work by giving them the tools to succeed. Last
year, we introduced CustomerFIRST, a comprehensive customer
service platform that empowers every JCPenney Associate
to make customers their No. 1 priority. Its success to date is
evident in:
• a notable increase in our Associate engagement score, with
particularly strong marks for giving Associates the training and
authority necessary to do their jobs;
• a substantial decline in our Associate turnover, which both
supports improvement in our customer service as well as
reduces training costs for new hires; and,
• a signicant improvement in our customer service ranking.
In fact, we ranked No. 1 in customer service among department
store retailers and No. 7 among all retailers in the 2008
National Retail Federation Foundation/American Express
Customer Service Survey.
Our Associate engagement work is part of JCPenney C.A.R.E.S.
(Community, Associates, Responsible Sourcing, Environment
and Sustainable Products), our corporate social responsibility
program. The strides we have made in these areas are described
in our annual Corporate Social Responsibility Report, which is
available through jcpenney.net and includes an update on the
growth of the JCPenney Afterschool Fund, the No. 1 national
organization dedicated to inspiring America’s children to be
smart, strong and socially responsible.
Building Value for Our INVESTORS
As we pursue these initiatives, we continue to manage our
business very conservatively. Specically, we are:
• matching our inventory levels with sales trends by further
reducing product development cycles and controlling our
vendor orders. This allowed us to end 2008 with comparable
store inventory 13.5% below 2007 levels. Looking ahead, we
are planning our inventories for 2009 to be down approximately
10%, in line with our comparable store sales expectation.
Highly satised Customers, highly engaged Associates
and highly rewarded Investors will enable us to emerge
a clear winner. Mike Ullman
“
”