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

NEWS

UPDATE: CHINA: Adidas supplier in Government discussions over strike

Adidas has said it is closely monitoring the Yue Yuen shoe factory strike in China and that the supplier is in talks with the country's Government in a bid to address worker's concerns....

BLOG

just-style seeks market research report writer

Do you have strong opinions, insight and expertise in a particular area of the textiles and apparel industry?...

BLOG

Political tensions will weigh on Cambodia's growth

As if political tensions and strikes for higher wages by garment workers have not already caused enough disruption in Cambodia, new research has suggested they will continue to weigh on the country's ...

NEWS

BANGLADESH: PM calls for clothing buyers to pay higher prices

Bangladeshi Prime Minister Sheikh Hasina has told The German Confederation of Trade Unions (DGB) she wants global buyers to pay more for clothes so her country can pay its garment workers higher wages...

BLOG

Energy-saving efforts reap rewards

Beleaguered US department store retailer JC Penney is at last getting something right as it continues to try to turn around its business: its commitment to saving energy and fighting climate change....

ANALYSIS

Tesco FY results: What the analysts say

UK retail giant Tesco this morning (16 April) proved it remains under pressure after it revealed its second consecutive annual drop in profits. Nonetheless, the beleaguered behemoth, which has seen it...

BLOG

Progress still lags on a living wage

The biggest news from just-style last week was the rollout of our new-look site. It has been redesigned to make it easier to find the key content that you need, whether you're reading it on a desktop ...

just-style homepage



Forgot your password?