J Crew cuts staff in cost-reduction program
SAN FRANCISCO, Feb 27 (Reuters) - Apparel retailer J Crew (JCG.N) announced on Friday a cost reduction program that includes job cuts to save it some $40 million annually in the difficult economy.
J Crew spring-summer 2009
The company said it would cut approximately 95 positions, mostly in the New York offices, support functions and distribution centers, and suspend merit-based wage increases.
J Crew will also suspend matching contributions to employees' 401(k) plans for the balance of 2009.
It said it would find additional cost cuts in areas such as supply chain, store operations, real estate, catalog circulation and other general areas in its New York headquarters.
J Crew has previously announced it will lower its planned capital expenditures for fiscal 2009 by 25 percent to approximately $55 million to $60 million.
On Friday, it said it would take a pretax charge of $1.5 million in the first quarter for severance payments and related costs.
J Crew, which operates stores, a catalog and an Internet business, joins other retailers from Limited Brands (LTD.N) to Coach Inc (COH.N) that have reduced staff levels and cut other costs in order to preserve profit in the tough economy.
In November, J Crew cut its full-year outlook and said the upscale retailer was not immune from the weak environment, in which consumers have sharply scaled back apparel purchases. (Reporting by Alexandria Sage, editing by Matthew Lewis)