Credit Suisse Looks To Macy's, Inc. As A Guide for J C Penney Company Inc Cost Cutting

In a research note issued Monday, Credit Suisse suggested looking at Macy's, Inc. (NYSE: M) post-2008 restructuring as a guide for J C Penney Company Inc (NYSE: JCP) cost-cutting initiatives.

Analysts Michael Exstein and Charlene Wong estimated that "excluding credit income, advertising, depreciation, and amortization, Macy's $400 million of cost savings represented 6 percent of 2008 SG&A."

Exstein calculated that "if JCP were to embark on a large-scale restructuring, we think the potential cost savings could be around $190 million on our 2014 estimates for SG&A."

Other analysts have suggested that cost cutting will come as a result of store closures.

The note concluded that cost cutting will not be enough, as "it will be challenging to see earnings power justifying the share price without top-line growth" and Credit Suisse awaited "further clarity on the company's planned strategic moves at its Analyst Day on October 8."

Credit Suisse has rated the company Underperform with a $7 price target.

J C Penney Company Inc recently traded at $9.39, down 0.53 percent.

Macy's, Inc. traded at $57.79, down 1.2 percent.