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Byline: RICH WILNER
NEW YORK -- Jamesway Corp. will seek to improve its bottom line over the next two years by cutting labor costs and by investing in new systems and store renovations, according to the firm's five-year business plan.
The plan, filed in bankruptcy court here along with the discounter's reorganization plan, entails trimming selling, general and administrative expenses to 26.6 percent of sales in 1994 from 28.4 percent in 1993.
Gross margins are expected to remain at about 27.6 percent this year and rise to 28.3 percent in 1995.
Jamesway hopes to emerge from Chapter 11 reorganization this year. The troubled discounter said in court documents that the anticipated drop in SG&A expenses would come from cuts in overhead and large investments in systems to reduce labor expenses at stores and the distribution center.
The 93-store chain is expecting a 4.1 percent same-store sales gain in 1994, followed by increases of about 2 percent in each of the subsequent four years.
The retailer plans to remodel 12 stores in 1994 and 19 stores in 1995. Four new stores will be opened in 1995 and again in 1996. One store will be added in 1997, and two in 1998, according to the plan.
Capital expenditures of $38.4 million over the next five years on store upgrades and maintenance are planned.
Jamesway also noted that it was considering moving its Cranbury, N.J., distribution center, and increasing the time it takes to pay its bills from 25 days to 29 days on average by the end of the five years.
-- Fairchild News Service