J.C. Penney Co. (JCP), the retailer struggling to bounce back from its worst sales year in two decades, will be replaced in the Standard & Poor's 500 Index by Allegion Plc., S&P said in a statement today.
J.C. Penney's market value fell 37 percent this year to $2.7 billion, making it "more representative of the mid cap market," S&P said. Allegion, which makes residential and commercial door locks, has a market capitalization of $4.2 billion. It was spun off from Ingersoll-Rand Plc and started trading on the New York Stock Exchange on Nov. 18.
The S&P 500 change will take place after the close of trading on Nov. 29, S&P said. The revisions in the benchmark equity index may prompt money managers to shift holdings to match it. About $5.14 trillion was benchmarked to the gauge, according to the S&P website.
J.C. Penney will bump Aeropostale Inc. from the S&P MidCap 400 Index, and Aeropostale will displace Corinthian Colleges Inc. from the S&P SmallCap 600.
Shares of Plano, Texas-based J.C. Penney have fallen 55 percent this year as the retailer reported quarterly losses in each period since mid-2011, including $489 million last quarter. The stock fell 1.4 percent in late trading today after losing 3.3 percent to close the regular session at $8.87.
Chief Executive Officer Mike Ullman, who returned as CEO in April to replace Ron Johnson, has restored promotions and popular private-label brands while ending his predecessor's remodeling plan. He also raised about $4 billion to try to give the company enough cash to complete a turnaround.
Revenue declines slowed in the quarter ended Nov. 2 and the department-store chain said sales and profit margins would improve during the holiday shopping season.
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