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.

By Kim Peterson Sep 20, 2012 2:08PM

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.

But J.C. Penney was very smart to embed its negative news within a flashy analyst tour. It unveiled a beautiful new layout, complete with computer browsing stations, Wi-fi access, coffee shops and tables with Legos and iPads. The aisles will be wider, and the whole store will have a brighter, cleaner feel.

 

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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Tags: DISJCP
2Comments
Sep 21, 2012 9:30AM
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People are idiots. I have personally saved over $100.00 with the new pricing. I didn't need to waste my time with coupons or wait for a sale. I got what I wanted when I wanted it and saved money.
Sep 21, 2012 9:24AM
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Nope, no thanks, not for me. Different "shops", egads it's hard enough to find anything now (if they have it which they usually don't), so let's divide the sloppy pie up into smaller pieces with 100 mini-shops. I don't have the time or patience to chase around the store, good luck finding a sales person and if you ask the standard response is "I don't know look over there"... or "we don't carry that".......   They need customer service not self service yet they don't seem to get the difference. Lots of over 50's like me are not techno-savy, if I want computer browsing I can do that online from home and not waste the 4$+ gas, but 95% of the time they don't have the size or color or style you want on line either. Sounds to me like they just plainly don't get what customers want or need especially for us old folks, but then again it's the kids who have the $$ to spend not us.  I have given up on Penney's, got rid of their stock and no longer shop there.   
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