J.C. Penney thinks the key to its growth is… shrinking

J.C. Penney Co. Inc. is plotting its turnaround path to growth by cutting back in a number of areas, including shrinking its inventory, shuttering stores and reducing the number of retail categories it will focus on.

Shares of the department store retailer soared 22.6% on Thursday after fourth-quarter earnings beat expectations. Inventory for the quarter was down 13.1% year-over year.

“We will continue to clear unproductive inventory swiftly and thoughtfully and implement new processes and training across our organization to ensure we prevent future buildup of excess inventory,” said Chief Executive Jill Soltau on the earnings call, according to a FactSet transcript.

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