The new retail giant Dannon, which is a subsidiary of US apparel giant J.C. Penney, is introducing a new way of doing business for its suppliers.
The company said it has taken a hard look at the way suppliers are organized and is trying to be more efficient, transparent and accountable.
The announcement comes a day after the retailer said it had laid off nearly 3,000 people and cut a $500 million deal with Sears Holdings Corp.
The decision comes as Dannon’s stock price tumbled about 10% to $4.90 a share on Monday after the company announced that it would reduce the number of suppliers it contracts with and shut down stores.
The news of Dannon laying off nearly 2,500 people was first reported by Bloomberg.
The new Dannon stores will have fewer than 100 stores and a much lower base of about 100 suppliers.
They will have more than 200 locations across the U.S. and Canada, with a mix of smaller, regional and national brands.
The move follows Dannon pulling out of the U to expand into other markets in the U, such as Japan and Europe.
The retailer said that the move was necessary to be profitable in a competitive global marketplace.
“It’s been a challenging journey over the past year,” said Michael B. Sullivan, Dannon Group chief executive officer.
“But we’re proud to be able to say that the Dannon team is committed to being more efficient and transparent in our supply chain.”
Dannon has been investing in a more flexible supply chain.
For instance, the retailer plans to sell clothing directly to retailers, rather than buying it wholesale.
It also plans to buy clothing through smaller brands in smaller stores.
Sullivan said Dannon has also improved its efficiency in how it delivers products.
He said the company has reduced the number and percentage of suppliers the company works with.
Dannon announced in May that it will phase out the wholesale business model, which has been the model for many retailers since it first began operating in the 1980s.
The company has since shut down more than 1,000 stores.