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

Brexit deal rejection worries apparel industry

Last week's rejection of Theresa May's proposed UK-EU Brexit deal by MPs saw chatter spike among industry execs who say a No-Deal Brexit could be problematic for the sector given its heavy reliance on...

BLOG

US trade updates out of date

Apparel and textile industry executives are among those being deprived of key trade and economic data amid the ongoing US government shutdown – at a time when trade tensions between the US and China m...

NEWS

Kering tops sustainability list for second time

Kering has been named the most sustainable corporation in the Luxury and Apparel and Accessories sectors for the second consecutive year, according to a new index published at the World Economic Forum...

BLOG

2019 off to a positive start

Getting 2019 off to a positive start, it seems US apparel retailers saw some holiday cheer, with strong sales momentum that started during the back-to-school season carrying on to Christmas....

NEWS

Gymboree Group files for bankruptcy for second time

US children's apparel retailer Gymboree Group has officially filed for voluntary Chapter 11 bankruptcy protection for the second time....

BLOG

UN sets new Fashion Industry Charter for Climate Action

43 leading fashion brands, retailers and suppliers – including Adidas, Burberry, Gap Inc, H&M Group, Inditex, Kering, Levi Strauss & Co, and PVH Corp – are backing the UN’s new Fashion Industry Charte...

just-style homepage



Forgot your password?