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

Revised wage ladder marks step toward living wage

An online tool to help apparel brands, retailers and manufacturers work towards improved wages for garment workers in global supply chains has been updated in a move that marks another step towards th...

NEWS

JD Sports offloads Bank Fashion unit to Hilco

UK retailer JD Sports Fashion has sold its struggling young fashion brand Bank to a subsidiary of Hilco Capital Limited....

BLOG

Firms urged to stay committed to Cambodia

Apparel brands have been urged to stay committed to Cambodia after a 28% rise in the minimum monthly wage was agreed for textile, garment and footwear workers....

BLOG

Port problems play havoc with holiday imports

US firms including apparel retailers and importers are urging the government to intervene in the ongoing dispute at US west coast ports, amid worsening delays on shipments of holiday merchandise and f...

BLOG

Forced labour claims weigh on India mills

A number of retailers were last week forced to respond to allegations of "forced labour" among female textile workers in mills in southern India, with H&M blacklisting one of the five named....

just-style homepage



Forgot your password?