Blog: Leonie BarrieJC Penney's future takes it back to the past

Leonie Barrie | 21 August 2013

Without naming names, it's clear Ron Johnson's presence continues to loom large at JC Penney.

Time and again on a call with analysts yesterday (20 August) current CEO Mike Ullman referred to "the mistakes of the past" as he tried to explain the department store retailer's dire second quarter performance.

"It's no secret that the company's prior merchandising and promotional strategies weren't working." "There are no quick fixes to correct the errors of the past." "Our top priority...has been...reconnecting with our customer who frankly had lost faith in us."

During his two-year tenure, which ended in April, former Apple executive Johnson hoped to breathe new life into the retailer by focusing on everyday low prices instead of promotions, in-store boutiques, and replacing private labels with new brands.

Customers deserted the store in droves, and since Ullman's return to the helm four months ago he has focused on reversing Johnson's changes step by step - by bringing back promotions, realigning inventories, balancing private brands (like Arizona, and Total Girl) with national ones (Nike, Levi's and Vans), and reinstating popular labels like St John's Bay.

To the cynic, it looks as though the retailer is heading in full-circle, with a strategy that is simply taking it back to where it was two years ago, albeit with even wider losses (US$588m in the second quarter) and slumping sales.

Optimistically, Ullman says despite double-digit declines, second-quarter comps saw a 470 basis point improvement from the last quarter, and sales have improved sequentially month-by-month.

But even he admits: "There are no quick fixes to correct the errors of the past." And even fewer, it would seem, to build the retailer of the future.

Sectors: Apparel, Finance, Retail

Companies: Levi’s, JC Penney, Vans, Nike

BLOG

Industry welcoming move to renegotiate NAFTA

The US textile industry has welcomed President Donald Trump's decision to renegotiate NAFTA, saying it is in America's national interest to modernise the trade agreement....

NEWS

Coach launches tender offer to acquire Kate Spade

Coach Inc today (26 May) made its earlier bid for Kate Spade official by launching a tender offer to acquire the accessories and apparel business for $18.50 per share in cash....

BLOG

Cutting edge technology defining apparel industry

Cutting-edge textile processing products including a new technology for dyeing yarns in a more sustainable manner and a digitalised sewing machine set up via a touchscreen or app, were among the most ...

NEWS

Deckers optimistic as Q4 loss narrows

US apparel and footwear group Deckers Brands - which last month said it was exploring strategic alternatives, including a potential sale of the firm - narrowed its net loss in the fourth quarter, and ...

BLOG

Ethiopia apparel and textile industry making massive gains

just-style's editor Leonie Barrie recently visited Ethiopia to see for herself the massive developments taking place to elevate this East African nation into a compelling new garment and textile sourc...

BLOG

Collaboration remains a challenge

Collaboration between retailers, brands and their suppliers is a mission critical element in developing a slicker and more cost-effective supply chain. But in an increasingly complex fashion environme...

just-style homepage



Forgot your password?