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

ANALYSIS

Why have US FTA apparel imports fallen to a record low?

In the past ten years the number of free trade agreements (FTAs) implemented in the United States has almost doubled. So why have US apparel imports entering under free trade agreements fallen to a re...

BLOG

Goodbye from your news editor

Having contributed to just-style for five years, serving as news editor for the last two, it has been a pleasure to observe and report on the global textile and apparel industry....

BLOG

TPP continues to garner industry attention

The US footwear industry has voiced its disappointment that athletic brand New Balance has come out in opposition of the Trans-Pacific Partnership (TPP) trade deal. ...

NEWS

House votes in favour of Miscellaneous Trade Bill reform

The US House of Representatives yesterday (27 April) voted to approve legislation to reform the process for considering bills that would temporarily reduce or eliminate duties of up to $500,000 on pro...

BLOG

Is British garment making showing signs of revival?

Despite years of denial, British garment making showed signs of a revival in the second half of 2015. Is the long-anticipated UK onshoring boom finally coming into view?...

NEWS

PTC develops smart connected PLM update

Software firm PTC has launched the latest version of its product lifecycle management (PLM) solution that it says includes role-based apps and ThingWorx platform connectivity for greater speed and eff...

BLOG

Risks include worker unrest in China

Risks ranging from cargo theft to natural disasters and terrorism incidents are among the biggest threats seen to global supply chains in 2016...

just-style homepage



Forgot your password?