J.C. Penney posts big loss, announces new brands
J.C. Penney posted a loss after unveiling its new look and pricing structure. Photo courtesy of J.C. Penney
The recent changes at J.C. Penney, including their new look and the “Fair and Square” pricing structure, had some blog readers wondering whether the changes would drive customers to the department store.
The answer, apparently, is no.
J.C. Penney lost $163 million in the quarter that ended April 28, or 75 cents a share, down from a profit of $64 million in the same quarter last year. (The company said that when taking into account the costs of restructuring the adjusted loss was $55 million, or 25 cents a share.)
“Sales and profitability have been tougher than anticipated during the first 13 weeks,” CEO Ron Johnson said in a news release.
The company reported the loss after it announced in February that it would eliminate its sales and instead offer three prices: best prices, month-long values and everyday.
Johnson, who came to J.C. Penney from Apple, remained confident he could turn the company around.
“While we have work to do to educate the customer on our pricing strategy and to drive more traffic to our stores, we are confident in our vision to become America’s favorite store,” he said.
Meanwhile, J.C. Penney announced it would launch new brands, including a JCP brand for men and women that will be in stores this fall, according to this Associated Press story. The company is also partnering with several designers, including Vivienne Tam and Betsey Johnson.
Do you like J.C. Penney’s new pricing structure, or do you miss the sales? Do you think the pricing structure will catch on with bargain-hungry consumers?
May 16, 2012 - 4:02 PM
As I initially predicted, the new price strategy will not work. As one Wall Street analyst put it – ‘Why throw away over a century of brand recognition?’
So JCP now wants to jump on the cheap price bandwagon? Decades after WalMart has made it their own? Not going to work. I’ll also stick by my assessment that quality of goods sold will worsen drastically.
I’ll be interested to hear how many posters who were so excited originally have increased their shopping at JC Penney since the beginning of February. Nationally, volume is down almost 20%.
I recently went into JC Penney’s here in Christiansburg and was totally dismayed at what I saw. I thought there would be more of a selection, but honestly, Penney’s is getting to be a lot like KMart. Things aren’t neatly put where they need to be – just thrown and there is little to no selection. If you want something, you need to order it through the catalog. I am a “hands on” type of person and I like to see and feel the merchandise. I believe that JC Penney’s, unfortunately, is not going to be able to dig themselves out of the hole that they are in.
My girlfriend shops JCP online and once their new pricing started the prices were $5 more than the items before February 2012 and their “best Prices” on the 1st and 3rd Friday rise to about $8 more than the items before hand. We all know stores mark-up items diring a sale but in these days we got to stores to see the pricing and to wait for the sale day to get a better deal. JCP….no deal, just “word” bait n’ switch.
In addition to fair and square pricing, JCP was going to limit advertising. Last week we received by mail TWO magazines, not just a short mailer, on the same day, and there was a full page ad in the paper on the same day. So much for “say what you do and do what you say”.
I used to shop JCP about once a month but have stopped going because of the new pricing and because of the lack of selection.
I was holding out judgement on the new sale system to give it a few tries. However I am not a fan. I use to shop at Pennys all the time. I would get $10 off $10 coupons a few times a year. I would also take advantage of their other coupons sent in fliers that could be used with sales. I no longer get my $10 off $10 coupons, which always got me in the store and I always spent a little more. The few times I have been in there trying to find something and I didn’t think the prices were as good as I would have gotten if I would have had a coupon. And it seems they don’t have as many people working that can help you. Recently my husband and I needed help trying to find something and after about 10 minutes we gave up and went to Belk where someone quickly helped us. Sales, Coupons and Customer Attention are all what keep me coming back to a store. Sadly it seems like Penny’s has lost all of them.
I used to be a once a week shopper at JCP – with myself and my children and 8 grandchildren I spent many the thousands at the store each year. But since the new pricing I have gone in twice and bought 1 thing. I have changed my shopping to Kohl’s and Belk. They have sales and discounts. It’s the only way I can shop. If I want to shop at Walmart and Kmart I will go there, I don’t need it represented in JCP.
I was in the retail business for many years, starting at JCPenney in 1982. I was taught a very long time ago about merchandising. Since the changes have taken effect, I have not purchased anything in JCPenney. You walk in and all of the racks are at the same level – there is no merchandising at all – nothing to make the customer want to see an outfit and say they have to purchase that item. In addition, to go into a store and see no “sale” signs, turns you off immediately. I realize some of the prices are cheaper; however, I used to purchase about 5-10 dresses a year from JCPenney when they would have their dress event. I could get great clothes at very reasonable prices during the sale. I have tried to purchase clothes in the store now, and I am unhappy with pricing and quality. The store has turned into nothing but a mini-Walmart or mini-Kmart. My advice – change it back before it is too late!
I have also been disappointed in Penney’s lately. I have only gone into their store at T-wood once and was not terribly impressed. Mainly their quality has gone down (it wasn’t the best to begin with), and their store seemed rather sparse. I agree with a few of the posters, if I want to shop at Wmart or KMart, I will, but Penney’s is looking/acting more and more like them.
Haven’t shopped at Penny’s in years/decades. Used to shop there all the time. They had a great line of perma press t-shirts for men, underwear that lasted like iron and a great line of jeans (before the Arizona brand). After they discontinued the t-shirt and jean line I didn’t have much reason to shop there. We now have a Kohl’s and that has become our favorite. I don’t think we have ever paid retail at Kohl’s and usually get our items for 40% or more off. Go into Penny’s every once in awhile, but their prices are too high and the store have a very crowded feel.
Belk/Leggett and Penny’s used to mean slightly higher prices but great quality-not now.
Used to buy Mom Shadowline gowns at Legget and they lasted years.
Oh well,LLBean is awful now too, so guess it is the way of the world.
Amanda. Did you find out any more about how the progress is going on getting a tenent in old Ukrops building? Work continues on the cite so am wondering if they have found a developer. Had heard they had several other retailers wanting to move in the shopping center when it is fully complete. Do you know if they plan to still go with the originial plan of the shopping center that Bland Painters had deveoped. That plan looked really nice with sidewalks, plant scapes and fountains- something that this town desperatily needs.
Amanda. Any updates on West Village and new tenants there. They look like that are starting to build phase 3. What about Keagy Village. Is there any plan to try to get new owners and tenants there?? Know they tried to auction back in December so wandering what is happening there. Thanks for all your updates. Love retail and finding out the latest!!
@Chris: I haven’t made the call to Valley Bank yet as I’ve been working on some other things, but I do know that the bank intended to clear the land to prepare it to sell to a developer. I don’t think that the fact work is still going on is an indication that a deal has been struck. As for whether they’ll stick with the shopping center that was originally planned, I couldn’t say without talking with the bank – but it might just depend on the developer, too.
@Chris: I met with Lew Jamison, the owner of the Shops at West Village, a few weeks ago. The work you’re seeing now is work to add 125 parking spaces and to connect the shopping center with Union Bank, creating a second entrance to the center. There are plans for another building on the northern end of the center, but Jamison said he’d only build it if he sees the demand.
In terms of new tenants, I wrote in the April 15 Retail Roundup column that EmPower Pilates and Yoga opened a studio at the shopping center, and that Scottrade will leave Keagy Village to relocate to West Village. I haven’t heard anything new since then. I also don’t know of anything happening at Keagy Village.
Thanks for keeping me on my toes!
THANKS Amanda!!
I to am very diappointed with JCP the selection is terrible and I don’t think the prices are anywhere as good as they were before I use to love the Saturday Morning Door Buster Sales I have not shopped there since Christmas and probably will not unless something changes.
I agree that the quality of merchandise @ Penney’s has dropped drastically. I used to like the Cabin Creek brand of jeans for ladies with elastic waists, but that brand was discontinued. I also looked forward to getting the $10.00 off coupons in the mail ’cause I always ended up buying more than what I normally would have. I, too, now shop more @ Belk since they still offer coupons toward purchases. I also agree with one of the posters in that sales help has dwindled. At VV, several registers had been closed (taken out of service) and you ended up walking around trying to find an open register. I was also told by some employees that several other employees had lost their jobs. I’d hate to see Penney’s fall in defeat like so many other anchor stores, but the management needs to turn things around quickly! Now, I hardly ever go in Penney’s.
For the stuff I buy it has been fantastic most of my regular items are the regular price now that I would have paid on sale before which I believe was the original intent of the program. I am one of their customers who goes there more now rather than less.
I used to shop at JCP every time I got a $10 off $10 coupon. Sometimes I’d just stock up on socks for free, but other times I’d spend $20 and get half off. I also used the $10 off $25 coupon to buy tennis shoes or a couple shirts. Since they stopped sending out those coupons I never go there. I bought my last pair of shoes at Kohls on sale. People love to use coupons and feel like they’re getting a bargain. Looks like the new sales strategy isn’t what the consumer is looking for from JCP. @gtbowyer
Never really been a frequent Penney’s shopper but had to visit the VV store a few weeks ago for a bridal registry and found 1 out of 25 items in stock in the store. When I printed the registry, I would told most, if not all, items should be in stock. Not sure if this was affected by the recent changes but it definitely did not warrant a want to return to the store any time soon.
The quality of JC Penney’s clothing has declined over the past ten years. It’s not always about how you sell it, or the price you sell it at, but rather what you are selling, and I refuse to buy low quality. I was in Penneys this past week and the one item I was interested in was out of stock in my size. Can’t say I’ll be back to shop there anytime soon.
I’m amazed as I read some of these comments because I’m in love with JcPenney’s! I feel like they have quality products and at great prices. I have purchased so much stuff for my new home since they restructed.
*restructured
Very pleased with the changes. Overall prices are cheaper and there are still sales they are just marketed differently. People just don’t like change.
I don’t care for the look of the restructured Penneys. The store seems so sparse, not much selection. Not many customers in the store either. Really miss the clearance racks, especially in the men’s department. Last year at the end of summer I was able to get several nice shirts for my husband for about $3 each. I hope they can just admit to their mistake and return to the great store they were before it’s too late and they go out of business.
@Chris: More changes are coming. I am writing in Sunday’s Retail Roundup column about how the stores are rearranging merchandise to create brand “shops.”
I’ve have been a loyal customer of JCP for years. It was always my go to store. Now, I’ve got to say, I hate even walking into the store. It doesn’t look and feel like the old JCP. I know, that’s what they are going for, but they missed what their customers want by a mile. The new JCP brand? CHEAP! It doesn’t come close to quality of their St.Johns Bay collection. I’m sorry to see JCP die a slow death but that is exactly what it’s heading for.
I used to buy ALL my sons clothes at JCP.I would take advantage of their sales plus have a coupon for a percentage off and on occasion have an extra coupon for valued member shoppers. When I visited my daughter in Colorado, I would take her shopping at Penney’s–Not any more. The prices are higher and I HATE the new “sale” booklets I get. They NEVER have anything I can use. The old flyer had clothes for the entire family, shoes, accessories, linens etc. plus a coupon for a percentage off. I haven’t set foot in a JPC store in 6 months.
Jcpenny was my store for the last 20 years .quality ,sales,good prices ,wide selections .not any more ,I hate even entering the new store .even walmart has more variety .I shop at Macys or khols now .
Ron Johnson, you’re truly destroying JC Penney. Clearly you’re aiming to reach a young demographic so it’s obvious that you and the company’s shareholders don’t give a damn about the customers that have kept the company in business for the last 100 years. Just because you helped create the Apple store doesn’t mean you can cross over and be a success in softlines. Not much merchandising with computers and phones and no vendors and buyers to deal with. Your lack of knowing what the middle-class female looks for and wants for herself and her family shows and you’re forcing us to shop at other retailers. Some of the best sellers have been discontinued and the quality of the clothing is extremely cheap not to mention that EVERY item in the store comes from China. I will truly, truly miss you JCP!
Jcp is moving in the right direction to position itself to be around for the next 100 years. I’m amazed to read all the comments about coupons. Coupon this. Coupon that. When will people figure out that coupons are a gimmick to lure you in. Jcp marked everything DOWN so you weren’t limited on web you could shop. A shirts is now 10 Dollars all the time. Not the 30 it was before, marked 40 percent off, and then another 10 dollar off coupon. Extreme couponing has driven retailers to mark prices up. Kohls (please notice the correct spelling) would mark up Vera wang bed sheets 10 or 20 bucks just so they could advertise a deeper percent off. It’s all tricks. I’m glad jcp has gone and made it clear “this is the price” no gimmicks no nothing.
And Kathy M – the customers that they don’t give a damn about, we’ll they are dying off. They are going for the young men and women of today to go forward another 100 years. And I don’t know if you’ve noticed but everyone’s clothes come from china. But If you went into a jcpenney now, you’d noticed all the “flagged” items. Those are the jeans and khakis and shirts in the men’s and women’s department that are made in the USA. Or all the toys that were sold at Christmas that were hand crafted wooden toys made right here in the states. The Arizona jeans made off 100% USA grown Cotton, and how those jeans had a tag you could scan and you could watch a video on what cotton mill they came from and see interviews with the farmers and family’s. lets just focus on the negative and not support growth and innovation.
I could not care less where the stuff was made, the stuff is tacky and cheap looking. You telling me Martha Stewart’s crap is made in the US? It would be a surprise. I don’t believe their shoes they carry are made in the US. So what percent are we taking about? Is this the replace gimmick for sales for you, the newest fix you require, that hooked you? You know, put a few USA tags on stuff. Cotton from the US sewed in China. Shoe leather from Texas glued and stitched in India? I really don’t care JCP doesn’t carry anything I want anymore, I am not into fad clothing that will be dated in 4 months. Why Ron the Apple genius thinks he can bag coupons for a WalMart advistised low price, that was creative, be a mini mall, this is what he thinks he is doing, to compete with all those small established specialty stores with old loyal buyers catering to the valley girls, located at one of JCP’s exit, is beyond believing. This is an unbelievable bad business model. Juice, coffee, place to hang out, this guy is crazy, now Starbucks? What is next a food court? Don’t laugh it is on the talk. Tell you what, you believe in this so hard invest your retirement in JCP stock, put your money where you mouth is. Their stock is rock bottom. JCP will look like Roses, Ron will be closing stores in smaller towns, cities to keep the others open then these will start closing leaving what is still opened at the other end in the low rent locations. Oh Ron, just so you know, if you opened every Apple Store in a used outhouse they would have been just as successful. You had a product line with almost exclusive rights to it, you either found an Apple Store reluctantly, order from Apple on-line, or went to Best Buy for little stock and sales people who would direct you to Microsoft products, I know, been there done that, 3 Mac purchases.