More bad news for JC Penney
There was nothing merry about the holidays for the retailer. Forecasters say sales may have dropped by as much as 30% despite tweaks to stores.
J.C. Penney's (JCP) big turnaround plan took another hit thanks to some particularly Scrooge-like holiday sales.
On Friday, UBS analyst Michael Binett downsized his forecast for Penney's fourth quarter and told Reuters he expects same-store sales to decline 28% after originally projecting a 20% drop. The New York Post piled on, saying that sources close to JCPenney told the paper that same-store sales were down more than 30% throughout the holiday season.
That's sent J.C. Penney shares plummeting nearly 8% in the last five days and continued the company's nearly 58% slide since February 2012. That was just after the company announced across-the-board price cuts and its intent to divide its nearly 700 large stores into a series of mini shops for brands like Martha Stewart, Izod, Liz Claiborne and others.
Unfortunately for J.C. Penney and chief executive Ron Johnson, a former Apple (AAPL) and Target (TGT) exec, consumers don't seem to think much of the company's strategy. Same-store sales were down 26% in the third quarter and Johnson abandoned his own limited-discounting policy for Black Friday deals and a recent spate of 20% to 50% price cuts aimed at reducing inventory.
Even Johnson realizes that changing customer tastes will require J.C. Penney to sell more products by designers like Betsey Johnson, Nanette Lepore and Marchesa, but racks full of everyone's great aunt's favorite brass-buttoned outfits have to be cleared first. That leaves the store stuck in a retail limbo where it's trying to transition from one customer base to another, but doing little to please either in the interim.
This puts J.C. Penney dangerously close to Sears (SHLD) territory. That foundering retail chain and its Kmart holding have resorted to selling off real estate within their large stores to gyms and grocery stores just to make a few extra bucks. Successive reports of falling sales and revenue at Sears and continued selloffs of both stores and intellectual property like Craftsman tools make Sears look like a company in liquidation. Even its remaining stores haven't been spruced up in a number of years.
The difference at J.C. Penney is that it at least appears that Johnson and company are trying to save the retailer. The chain is pressing on with its mini-stores idea even as it abandons its anti-discounting stance and Johnson and others continue to invest cash and energy into the brand. With sales dropping by more than a quarter with each earnings report, however, all that effort may amount to going down swinging instead of going down looking.
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J.C. Penney stores are bland and are as thrilling as watching paint dry, back in the day they sold everything, furniture, electronics and other items....Just like Kmart they haven't kept up with the times, when I think of J.C. Penney I think of my grandmother......Kmart on the other hand could be a retail player once again if they upped customer service and updated the stores, it's like a time warp back to the 70's.......both of them better figure it out soon otherwise I see them going the way of Montgomery Wards....
I have always love JCPenneys-It was and still is a great retail store-Please people give it some time to work with the new strategies in place by these new CEO. Remember JCP has been with us for more then a century and employ lots of people that needs their job, lets be more positive
about this great company. It is easy to complain about things - how about more sugestions on how to improve what is already there in place- Lets all hope to a better 2013.
Retail is over!! Its called a changing of age! You know we have a industrial age that started nearly 100 years ago spawning 2 huge world war's and its coming to a end cause of something called the digital age. Guns will be banned soon instead of simply using digital tech we have common now to signal law enforcement a moment you disarm a lock on your firearm thats a reality now science fiction. We can signal the police if someone breaks into your house or car but not when you unlock a gun? LOL I call bullcrap.
It was so bad we couldn't even find the shoe Dept.
Moron move by JCP I would be it counts for a lot of loss if they did it to more stores like that
Look, I am an older lady that doesnt like to look like
I just fell into a flower garden!! I know they buy everything
from over seas but the quality is poor and colors are
worse. Give me back respectable clothes,coupons and
a salesperson that can tell me where they hid them.
Give the purchasing decisions back to each store
manager, they know what the local customer wants.
JCP was and is just a name people. You all were shopping there because you thought it set u apart from the "poor" consumers. My mother always shopped at JCP but I hated their styles and their clothing was ugly plain damn ugly. It was rare that I found something that looked like I would want to wear. If JCP wants to compete with fashion, and do not forget people, that is exactly what stores like JCP are, fashion places for designers to showcase their line; JCP must allow fashion to run rampart in its stores or it will continue to fail. Those of you that are pissy of the "change" are pissy because that will mean all type of consumers will walk through that door and it will no longer be a "middle class" store. End of Story!
The only problem I have is our store at Warsaw, IN is not big enough. I like not having to mess with the coupons and the prices are where they should be. As for not having desingers items what is Liz Calborne?? I have no problem finding the items I want only that our store is small so we do not have the wide varity. I am 70 yrs old and still like fashion. I may add I like women and men that tell me they like the way I dress. I say JCPenney's Don't have to pay big money and BRAND names to keep in style. MONEY is and should be the big mind thinking. GO JCPENNY.
I have shopped at J. C. Penney's my whole adult life (I'm 75) and yes I am computer literate. However there is nothing for me to buy anymore.
Even my grandchildren don't care for the styles you now present to us.
I am not Haute nor will I ever be just a simple middle class person who is looking for simple styles that will last me more than one year if I live that long.
It seems that Mr. Johnson has his own version of success. What made JC Pennys a household staple was its reliability of product. It had reasonably priced merchandise that was a good quality. I agree with other poster..if it ain't broke, don't fix it. I have been a customer for many years but haven't really found anything worth buying there in the last several months. I particularly don't appreciate the "magazine" like ads that come in the mail. They are immediately round-filed..nothing of worth in them. I enjoyed the coupons and the feeling that you were really getting a bargain (whether or not you were). JC Penneys will never be a Neiman-Marcus or anything like it. When I go to the mall, this store is nearly always empty. Its too bad but seems like Penneys will be only a memory soon (kind of like Montgomery Wards, if you remember who they were).
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