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.
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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JC Penny never should have changed. It's been about a year now and business keeps dropping. Get rid of those a-hole C.E.O.'s and don't give them no bonus or buy-out for leaving.
You don't go from running adds and giving coupons to "we just have everyday value prices"! Shoppers have a mind set and after all these years, you just don't turn that off and get people to shop the way you want them too.
My local JCP is half empty. They have spaced out the inventory to make the store look full. There is only like 3-4 cashier stations, when there use to be about 10.
Funny thing is, JCP has spent thousands on hand held electronic devices as lonf as you use a credit card. So now you have the cash register and this probably $2,000 hand held device.
There is time to save to the company. Just look back 1 1/2 to 2 years ago. Look at your competition. Macy's and Kohl's still run adds and give coupons.
I use to spend over $2,000 a year easy at JCP. Now, it's like $50
You don't need a crooked shelfish CEO to make decisions because he a piece of paper hanging on the wall. Look at what works and does works and listen to your customers.
Sears and JCP are probably the oldest retailers in our country and now cheap crooked CEO's have cut corners and quality of products to fill their already deep pockets and are putting them out of business.
I also add my voice in disappointment with the new JC Penney store. I wrote a letter to our local store after seeing the interview and promotion of the new approach. I was sickened that they made a big, smugly offensive deal of choosing Ellen as their new spokesperson, etc.--------in that she embodies what they stand for now. I stated I couldn't shop there anymore, and haven't. It saddens me, and I do miss it, as Penney's was always my shopping choice. Living in Mo., I've been to JC Penney's home museum in Hamilton. It is such a treasure and tribute to America's ways. I wish the CEO would have looked to him as their new spokesperson. It could also have helped educate us all.
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