J.C. Penney’s Cost Structure

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J.C. Penney’s Cost Structure
Description
J.C. Penney is a publicly-traded national retail chain based in Plano, Texas. It operates more than 1,100 outlets throughout the United States and its territories. Annual revenue for 2009 was about $17.5 billion. The company operates on a January 30 to January 31 fiscal year.
Cost structure
J.C. Penney has several expenses, both fixed and variable. Its largest variable expense is that for selling, general and administrative (SG&A). In 2009, SG&A accounted for $5.3 billion, or about 30.2% of revenue. Its largest fixed expense is the pension obligation to current and retired employees. That totaled $337 million during fiscal 2009-2010, or about 2% of its total revenue (“J.C. Penney Reports,”...

.....y Contribution,” 2010). It also plays into J.C. Penney’s notion of long-term flexibility: it has seen many large companies struggle with meeting its pension obligations.
When it comes to cost structure and management, J.C. Penney is obviously focused on both its fixed and variable costs, tweaking both to try and remain profitable in difficult times.
References
Birchall, J. (2010, February). “JC Penney confident on growth. Financial Times.
FT.com.. Retrieved June 12, 2010, from Research Library.
“JCPENNEY Reports Fourth Quarter And Full Year 2009 Financial Results.” (2010, February). JCPenney.com. Retrieved June 11, 2010.
“Proceeds Used for Voluntary Contribution to Qualified Pension Plan.” (2010, May). JCPenney.com. Retrieved June 11, 2010.