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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Well, I used to shop at Penny's all the time. Whoever came in and took something that was working and **cked it up. I don't like your new clothes and will NOT change my taste to shop there.
Therefore, you lost me last year. I don't even stop in the store anymore.
If you think making the store into little "shops," will bring people back, think again.
I was a loyal shopper at JC Penney for years, because the quality of the clothes was very good. Nice cloths that would last and had style. I have to say now since you turned into Walmart I shop at Kohls. Go back to what you had before, you can still add the newer trends for the younger crowd but don’t give up quality for price. If I want cheap clothes I’ll go to Walmart or Kmart.
Why did they take the discounts coupons away? As a matter a fact I was there over the weekend, Montclair, CA store I commented to the sales clerk that the store looks better than Macy's on the other end it did an I was telling the truth the store looks high end really nice!! Anyways I ended up purchasing a blouse for 18 and a sweater which I thought was 35 but actually came out to be only 20 I was happy when I left!!! Too bad JC Penny is going down hill I did have credit there but was shut down due to 3 late payments which wereny my fault? I'm now caught up an paying them currently but my credit has been stopped Oh Well JCP you figure why I got penalized an I understand. I was a good paying crdit card customer before the 3 lates but what goes around comes around!! Go Figure JCP????
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