JC Penney unveils new 'iPhone-like' store format
Though analysts praise the new 'art studio' design, shares still fall after the CEO warns of continued sales weakness.
J.C. Penney (JCP) just can't catch a break.
The retailer invited hundreds of analysts and investors to Texas on Wednesday to check out a prototype store that fully reflects the vision of CEO Ron Johnson. The tour was meant to wow investors, and to some extent it did, as J.C. Penney shares spiked in the afternoon.
But in a presentation to analysts, Johnson hinted that the second half of the year will see continued sales weakness. Menswear hasn't been selling well, and with no back-to-school coupons, sales in September were unexpectedly rough, Barron's reports. Investors fled the stock, and shares closed down more than 11% to $25.83 Thursday.
Ultimately, Johnson wants the stores to have close to 100 mini shops. That's never been done to such an extent.
Some analysts were sold. "We found the JCP prototype store to be inviting and exciting, with brighter lighting and ample mannequins to better showcase an impressive array of trendy product," wrote Citi's Deborah Weinswig, according to Barron's.
"We want to believe this can work, and longer term, we think it will," added Nomura's Paul Lejuez. "But this has been, and will likely continue to be, a roller coaster ride with many ups and downs."
In remarks to analysts, Johnson described the store prototype as an "art studio." He said it's hard to understand what J.C. Penney is doing until you actually visit its space and see it for yourself.
Each of J.C. Penney's 100 shops will be a "pure" experience, Johnson added. When you go in the Disney (DIS) shop, it will feel like you're in the Disney store. The shops will have their own signs, hangers and sales tags.
He compared J.C. Penney's ecosystem to the iPhone's. The phone is great, but the reason we love it is the apps. He said all the boutiques inside J.C. Penney are like the apps. "The secret is the shops," he said.
The average person goes to only four stores per mall visit, Johnson said. He wants J.C. Penney to become the one store shoppers visit to find everything they need.
"We think it could be America's favorite store," he said. "It ain't going to be easy. It's going to take a lot of time. But that's why we're here."
You can read the rest of Johnson's comments here.
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