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

Hanesbrands Q4 performance "disappoints"

US apparel manufacturer Hanesbrands delivered a somewhat disappointing fourth-quarter performance, as warmer weather hurt sales, and provided "conservative" guidance for fiscal 2016. ...

BLOG

Outdoor gear could be harmful

Outdoor brands are being urged to eliminate all PFCs from their products and supply chains after the hazardous chemicals were discovered in clothing, footwear and outdoor equipment....

NEWS

Oeko-Tex sets new STeP certification criteria

Oeko-Tex has put new criteria into place for its STeP certification standard, designed to make the sustainability of production facilities throughout the textile supply chain visible using a transpare...

BLOG

What next for apparel sourcing?

While consumers increasingly crave instant gratification, one-of-a-kind merchandise, and more options than ever before in terms of products and how and where to buy them, retailers and brands are bein...

BLOG

China manufacturing continues to change

US President Barack Obama last week used his final State of the Union address to appeal to Congress to ratifiy the Trans-Pacific Partnership (TPP) trade agreement....

BLOG

Industry issues kick-starting 2016

What are likely to be the key apparel industry issues to watch in the upcoming year? To kick-start 2016, just-style has again asked leading executives for their thoughts on potential challenges and op...

just-style homepage



Forgot your password?