Is JC Penney's new look a failure?
The man who redefined Apple's retail space is attempting an overhaul of the floundering department store -- but analysts and investors aren't convinced.
Over the past year, JC Penney (JCP) has embarked on a grand mission to boost its lagging sales and redefine its dated brand. But its first major bid to be the next great American retail space is facing a setback.
Last weekend, investors reacted to a sneak preview of J.C. Penney's new look with disappointment, sending the retail chain's shares tumbling and sparking concern about its long-term sustainability.
The "new J.C. Penney" is spearheaded by Ron Johnson, the brain behind Apple's (AAPL) wildly successful retail makeover in 2001. Under Johnson's guidance, J.C. Penney will embrace a "stores in a store" model that will see brands setting up mini-stores on Penney's floors.
Though responses to Johnson's model have been generally positive, there are many people who doubt he can achieve the total brand makeover he's attempting, which aims to attract younger, higher-income shoppers.
After all the hype, does the new J.C. Penney stand a chance?
Johnson's plan is dead in the water. After plenty of hype, the sneak peek of JC Penney's new look "failed to inspire confidence" in Johnson's grand vision for the chain, says Sapna Maheshwari at Businessweek. Johnson's model store was impressive looking, but it's just one store; the real challenge will be "to replicate it in 700 stores" across the country, and even then, it's not clear that sales will improve. The consensus among the analysts who got a taste of the new JC Penney was mixed at best, and it will be an uphill battle back to profitability, with plenty of pitfalls along the way.
The model is a diamond in the rough. The "experts" scoffing at Johnson's plan are the same ones who predicted Apple's demise "because other retailers like Gateway were failing," says Carmine Gallo at Forbes. Johnson beat the odds before, and with JC Penney, he "has a very real chance to successfully re-imagine the customer experience yet again." Johnson's forward-thinking plan is "still in the first inning," but his comprehensive knowledge of contemporary shopping habits will eventually lead him to accomplish his "audacious yet captivating goal."
His plan isn't bad, but it may not work for J.C. Penney. "It might just be easier to launch an entirely fresh and new department store from scratch, rather than attempt to drag a 110-year-old brand into the future," says Brad Tuttle at TIME. In its bid to transform its "old lady image" into something sleek and modern, Johnson has thrown out the store's old coupon-based pricing system -- and as a result, lost its old customers. And even if the "epic transformation" pushed by Johnson is possible, there's a serious chance that it won't be in time: As J.C. Penney sales (and stocks) continue to decline, it's clear that "the much hyped transformation just isn't occurring quickly enough."
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This guy will drive them into the gorund. I hate to see it. Pennys has been a good store to me and my family for many years. The consumers have spoken. Boot this guy to the curb. I could run the company better than him.
I miss the old Penney's. he new clothes are awful. I don't know who would want to wear them. The cheaper prices reflect the cheaper quality. It looks like everything is coming from cheapest overseas manufacturers. Only the little girl clothes department maintains the flavor of the old Penney's. Looks like I'll be retiring my Penney's charge card soon.
Here's the issue: Major chains like Macys, Younkers, JC Penney, Christopher Banks, and the like have spent their time and money catering to the younger crowd - the ones that have no money. Meanwhile, the rest of us in the middle age and older (and with the money to spend) are forgotten. We don't want to shop where our kids want their clothes from because, let's face it, we look stupid trying to dress like a 20 year old.
Until JC Penney can go back to what it was - a store for all generations; I don't see it as making it. In addition, they're going to have to get to updating their stores - the one near me looks like it is right out of the '70's.
I HAVE QUIT SHOPPING THERE. IT IS CHEAP STUFF AND THEY HAVE NOTHING. VERY DISAPPOINTING.
I get that they are trying to be "new" and "hip" for the younger generations BUT the younger generations have enough stores to choose from, they are not going to shop at JCP even if they try to entice them in. JCP would have better luck trying to keep us "older" generations, the same ones who have kept them going for years and years. I loved the old JCP and shopped there regularly but since they have changed I have only been there twice. TWICE.... I couldn't find anything and what I did find was too "young" and cheap feeling for me. I loved the coupons and always liked shopping the sales but alas if it keeps going this way this "oldster" will find somewhere else to shop.
JCP is completely missing what consumers want- which is excellent customer service and good quality merchandise that will last! Please, tell your children's buyers in Plano to get a clue!
Let's face it, the current advertising is very UNINSPIRING> I don't want to see a situation, I want to see what is on sale. And without a coupon, what is going to make me go there today , tomorrow, or next week.
Bring back the brands, the sales and the coupons, all of the changes over the last year were simply a miss.
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The solid report comes a month after the retailer closed all of its Canadian operations.
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