Plano based JC Penney closing 33 stores (Howe: house, to buy, camper)

[Adamson865]

Originally Posted by highcotton

Close 'em all. The decision to hire CEO Ron Johnson was a huge mistake. Not only did he put a gay-friendly stamp on the company which offended a lot of people (why would a CEO publicize their view of such matters), but he also dropped the very pricing policies that made JCPenny popular with their base...and their customers expected and wanted those pricing policies to continue - marking up prices and then offering discounts with heavy promotions...

I don't believe JCP "offended a lot of people" except those curmudgeons who make a habit out of being offended. JCP is just in the same boat with other sinking (or sunken) retailers such as Ward's, Sears and KMart. That whole type of store just seems to be slowly dying off. I haven't been in one for years.

[Gree Mountain]

Here's another explanation for JC Penney's woes: http://www.nytimes.com/2014/02/03/bu...&rref=business

Perhaps over thirty years of wage stagnation for workers not in the top twenty percent of the income ladder combined with the financial collapse have taken there toll.

[GBCommenter]

Originally Posted by TheOverdog

When I was graduating from college in 2000 I had an interview with JC Penny IT, and the recruiter/interviewer was basically talking up what a terrible job and bad place to work it was. So even though it had a few decent years in the mid 2000s it's been on a downward trajectory for a long time. They and Sears both could have been competing with Amazon (remember the JC Penny catalog?) as rulers of the online universe but they just don't have the mgmt vision to do anything.

Originally Posted by rah62

I don't believe JCP "offended a lot of people" except those curmudgeons who make a habit out of being offended. JCP is just in the same boat with other sinking (or sunken) retailers such as Ward's, Sears and KMart. That whole type of store just seems to be slowly dying off. I haven't been in one for years.

My thoughts FWIW...

The above speaks to what I think is running strongly against JCP. The chain is part of a "beige" shopping experience. Nothing in particular to draw people to their store they cannot get somewhere else, and with vastly more competition, including the internet in particular. If I can get all my belongings from Amazon, do I need to go out of my way to JCP? I think about the list of store closings and see a number of them in small towns. JCP may have been able to dominate and hold a base where there were larger populations in small towns, and when there wasn't an internet full of shopping choices. Do you now need to go to the store all the time when you can get your merchandise dropped off at the house via Amazon.com, Zappos.com, every big box retailer such as Target.com, Walmart.com, Kohls.com, etc. etc. etc.? And what if that store is in a town with a declining population that is moving to cities? Again, when you are marketing a "beige" set of merchandise and experience, it's too easy for your customer base to wander to something unique and splashy - or just wander away from the town your store is in. I'm not sure JCP can outrun that.

Roll in an economy with large portions of people still on some form of public assistance (and I realize this is treading into politics, but the numbers bear me out), and you have what might have been former customers deciding the socks at Target or Walmart will suffice, and don't have the finances for a JCP shirt.

Also, whether politically correct or not, there is a perception by enough people that JCP decided to be more concerned about political correctness than the basics of retail: clean, attractive stores stocked well and with pleasant, engaged staff - and usually an experience that causes you to want to return.

My guess is unless JCP can get its basics in order and find something to differentiate itself in the market, the huge number of articles you can find by Googling "JCPenney demise" will come true - it will only be how long the slow death spiral takes. Unfortunately, JCP may not have the time or resources to avoid the demise.

Perhaps they need to take a cue from Target. Target knew long ago they could never compete against Walmart on price alone so branded themselves as "cheap chic". Some trendy stuff you cannot get elsewhere, still good prices on everyday stuff, and an experience unique to Target that would cause customers to want to shop there so they can run around and boast they are "Target shoppers". Poo-poo that if you want, but Target keeps opening stores instead of closing them. They also understand a brand isn't about the company, it's about the customer who shops there to be associated with the brand and be able to tell a story about themselves. JCP competely lacks that right now.

[Adamson865]

Originally Posted by GBCommenter

My thoughts FWIW...

Also, whether politically correct or not, there is a perception by enough people that JCP decided to be more concerned about political correctness than the basics of retail: clean, attractive stores stocked well and with pleasant, engaged staff - and usually an experience that causes you to want to return.

"Political correctness" being code words for "having gay characters in one of their commercials".

Would you feel the same way if they had [gasp] black people in their ads? The African-American population in the country is estimated at around 12-13%, which is barely more than the estimated 10% LGBT population in the US.

Would you prefer white heterosexuals in every commercial? I certainly don't. It's long past time a large segment of the purchasing population is finally included in TV and print advertising. If the reactionaries can't handle that, then tough. They're predominantly old and don't have much purchasing power.

[Runnn]

Originally Posted by frenzyrider

And the perpetual exercise of cost cutting goes on and on....

Amen! Isn't it ironic how a companies expand and contract like the wind blows. They centralize and then they de-centralize at the flip of a coin. Any manager (notice I didn't say leader) can resort to cutting heads and locations just to expense themselves into profitability. Sadly this approach doesn't fix anything, nor does it "root" cause the systemic concerns. It DOES, however, generally please Wallstreet, so is must be good right?

[GBCommenter]

Originally Posted by rah62

"Political correctness" being code words for "having gay characters in one of their commercials".

Would you feel the same way if they had [gasp] black people in their ads? The African-American population in the country is estimated at around 12-13%, which is barely more than the estimated 10% LGBT population in the US.

Would you prefer white heterosexuals in every commercial? I certainly don't. It's long past time a large segment of the purchasing population is finally included in TV and print advertising. If the reactionaries can't handle that, then tough. They're predominantly old and don't have much purchasing power.

Golly gee, thank you so much for putting out there what I was really trying to say...you are absolutely correct that what I personally want in every thing I see is only straight WASP's in television and ads. Mother should be doing her God-given task of cleaning my house with perfectly coiffed hair and a cute dress no more than knee-high - while making sure my meal is ready for me when I get home from work and served on a perfectly set dinner table. Make sure that any minority is hidden from view or only seen holding the door for me while ingratiating themselves bowing down and hollering "OH, HELLOS THERE, MR. GB! IT'S SO GOOD TO SEES YOU TODAY!" Make darn sure I'm not subjected to any slanty-eyed people, towelheads, and not even any Catholics running around with their little bead things and worshipping a guy with a funny white hat. You have completely hit on the head what my thoughts were TRULY about and what was really important in what I wrote!



Are we done yet? Can we get beyond the putting words into my mouth and actually look at what was said?

JCPenney, as with any retailer, should be concerned about selling their product, in this case general merchandise. Unless they are going to start selling only political merchandise, it is to their danger to be spending time and effort to make political statements. Whether the political statement was "good" or "bad" and whether various groups want to see a particular ad is irrelevant (especially for a retailer long established as a general merchandise retailer to middle America), JCP was too worried about a political statement by explicitly including homosexuals in their ad, and the market made that determination, not GBC. We can give ourselves a warm fuzzy by castigating "...reactionaries...predominantly old and don't have much purchasing power...", but they apparently contributed towards the closing of 33 (more) stores, huh?

Or maybe we could look to the stock price of JCP in May 2012 when the ads came out (according to a quick reminder search via Google), approximately $35/share. They appear to have closed today around $5/share. Maybe those "reactionaries...predominantly old..." have a bit more purchasing power than you want to give credit (which is not to say all of JCP's woes are only on this aspect - which I talked about above. If we bothered to read the whole of my statement and not cherry-pick, we can see what I was saying it all contributed in a arena JCP can ill afford to be screwing around).

Among many factors, JCP should have been concerned about being a general merchandise retailer and let the political class worry about political statements.

[Oildog]

Sad to hear. I grew up on JC Penney and Target. I will be reading up on why Target still seems successful while JCPs fortunes seemed to have slipped away. Good points GBC.

[GBCommenter]

Another thought, more to a general speaking point than a response to others...

Imagine if JCP (since we are talking about JCP, but could have been Sears as easily) had invested serious time, effort and $$'s back in 1994 into online selling (which is when Jeff Bezos was just a scrappy crazy entrepreneur risking it all on a little company called Amazon.com) . JCP likely had the resources to bury Amazon and dominate retail, but stuck with brick-and-mortar stores because "that's what we've always done".

Admittedly, hindsight is 20/20 but it is a billionaire names Bezos (among others) that is the slow death knell to companies such as JCP and Sears (or at least seriously altered their fortunes). Unfortunately, it may be too late to break out of the mold JCP is living.

[BeenThereDunThat]

I had a good friend who used to work for JC Penney corporate for years. He told me that JCP used to allow their regional store managers considerable leeway in choosing product type and how much for their regional markets as certain things would sell better in one part of the state vs another. This management feedback helped a lot but then in the early-to-mid 1990's, product lines were consolidated at the corporate level and approached pretty much a one-size-fits all approach because their purchasing bean-counters could get a greater bulk-discount on clothing merchandise, etc. Soooo local managers were pretty much out-of-the loop in helping with product-line emphasis and inventory. While it made sense from a purchasing standpoint, a lot of product lines became less of a sell-through in some markets so deep discounting would take place.

Then as a result, product-lines became less trendy and so the things got a bit stodgy inventory-wise. Every season you'd see the JCP brands looking the same as the year before and so on and so forth. Flattened sales growth ensued and then ... the new guy comes in to "change everything" ...does away with the mainstay of sales coupons that customers had been conditioned over the past two decades and discount-sales were a thing of the past. Tried to make stores look like more H&M or Abercrombie & Fitch ... and while the layouts are an improvement...the inventory and ad push was going very..very young and totally alienated their core-customer base. Seems the new CEO didn't think this through to carefully... and sales sucked and the stock tanked.

It's going to take some time for JCP to recover. I still think it is a solid brand and in no way like what is happening to SEARS or the past exodus like Montgomery Wards (which totally failed to adjust to market changes and lived in the past).

I wouldn't count JCP out just yet.

[smuboy86]

Originally Posted by Oildog

Sad to hear. I grew up on JC Penney and Target. I will be reading up on why Target still seems successful while JCPs fortunes seemed to have slipped away. Good points GBC.

Which is funny since Ron Johnson was at target when it reinvented it self in the 1990s.