Blog: JC 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.
A special event on ‘The Fit Factor – World class wisdom on fashion sizing and fit’ will bring together speakers from Marks & Spencer, Tesco, C&A and Debenhams in the UK next week....
Sportswear business Puma Argentina has selected Infor Supply Chain Execution (SCE) to enhance its logistics operations and help support growth....
A tentative agreement on a new five-year contract has been agreed for some 20,000 dockworkers at 29 US West Coast ports, ending nine months of discussions. The Pacific Maritime Association (PMA) and I...
As the threat of a US West Coast port shutdown looms, analysts already estimate the ongoing disruption could add an eye-watering US$36.9bn to costs over the next 24 months. ...
Lingerie, sleepwear and sock manufacturer Delta Galil Industries said it remains open to strategic acquisitions as it booked an increase in fourth-quarter earnings and sales....
Do you have any burning questions you’d like to ask a renowned global garment industry expert? For free....
- Why should brands care about China cotton?
- Low labour cost countries linked to highest risks
- China cotton: implications and opportunities
- COMMENT: Skills or new technology?
- Who has signed the Bangladesh safety accord?
- South Africa to grow grass for recyclable textiles
- Activewear driving US apparel spend
- JC Penney share price falls on Q4 loss
- Sri Lanka and Bangladesh FTA talks underway
- Delta Galil open to M&A as profit grows
- Outdoor performance apparel: peaks, valleys, and green fields
- Myanmar's Garment Sector - Opportunities & Challenges in 2015
- Global market review of swimwear - forecasts to 2019
- Apparel Retail: Top 5 Emerging Markets Industry Guide
- Management briefing: Outlook 2015: Apparel industry issues in the year ahead