Posted on 05/17/2012 4:54:55 AM PDT by Caipirabob
J.C. Penney (JCP) shares tumbled Wednesday after the retailer reported a much wider-than-expected first-quarter loss, suspended its dividend and saw weakness across all core metrics.
In an apparent rebuke to new CEO Ron Johnson's strategy to change the company's focus from discounts to everyday low prices, total sales fell 20% while same-store sales declined 19% and gross margins fell to 37.6% from 40.5% as foot traffic in the stores dropped 10%.
"Our marketing isn't doing the work," Johnson said in a conference call. "We've got to get our pricing across. Coupons were a drug, they really drove traffic. [Customers] need to understand the value we're offering."
But it's Johnson, not J.C. Penney's customers, who has a problem understanding what the retailer needs, says Howard Davidowitz, a veteran retail banker and CEO of Davidowitz & Associates.
"He's caused incalculable damage," Davidowitz says of Johnson, who joined J.C. Penney last year after running Apple's (AAPL) retail operations. "The customers are everything. They don't know what the hell he's doing."
(Excerpt) Read more at finance.yahoo.com ...
This is the problem with know it all executives and advertising. He is thinking like a democrat. He said “marketing has not done its work” as if marketing only proces sales. Bad marketing, like the jcpenny fiasco, COSTS sales.
JCPenny now has a stigma associated with it caused by this “bad taste” campaign. Cause and effect.
DITTO. Ask JLo.
Most of JCP’s competition carry similar (or the same) merchandise at similar prices. What helped keep Penney's shoppers loyal was the friendly atmosphere and service they received from store employees, in combination with the coupons. It was a middle America store. In less than a year, Johnson has alienated much of the JCP customer base.
The coupons are now gone as are a number of those same employees, as Johnson terminated a number of employees, some who had been with the store for over 20 years (http://www.freerepublic.com/focus/f-chat/2879419/posts). Their roles are being filled by the overwhelmed and underpaid remaining staff.
In addition, I've heard the stories of how those longtime employees were let go....told they were fired on the spot and escorted out of the store by security. Not exactly the kind of stories that promote customer favor in a community.
I don’t know either. I have never shopped at Penney’s, for no particular reason but when they started those new commercials, I didn’t get them. I looked up their supposed new policy and it just sounded like a bunch of double speak.
All I’ve ever learned about retail is that there are a certain percentage of the people who have to have the “new” things first, no matter the cost. Then the discriminating, who are waiting for a lower price and then the cheap ones who will wait for steep discounts.
I know people who plan all their shopping by the sales and would never buy anything not on sale.
I had another thought, the reason Kmart has gone steadily downhill is that they have great sales prices in their brochure but they never have the sale merchandise when you get there and they still haven’t figured that out.
You have to get people into the store and then hope they’ll see things they just can’t live without that aren’t on sale.
His having a pants-wearing lesbian who trashes the sacrament of marriage every day that she’s on probably doesn’t help.
Just to see that he/she/it on their advertising turns me off 100%.
I won’t even park my car outside their door to walk thru it to get to the other stores.
1.8% of the population is doing tons of damage to our country, and this kind of nonsense doesn’t help.
They screwed up in both social issues and fiscal policies. The sales are what kept folks coming and helped them reduce old inventory. The “everyday low proces” was a scheme to cut losses/increase profits on inventory that nobody wanted at original prices and is having the exact opposite effect - now they can’t sell it at “everyday low prices” and don’t exercise the sales mechanism to clear it. Eventually they will fill up with items nobody wants and can turn into a museum instead of a department store.
I know. My wife works as Dillard's where they don't believe in coupons and rely on their every-day-low-prices as a customer draw.
Down on the other end of the mall is Macy's where they usually have daily coupons that bring in customers. As some of the freepers have mentioned, having a coupon in your hand is better psychologically then just saying we have every-day-low-prices (which Dillard's does not necessarily have).
Dillard's marketing stinks. And since JCP has latched on to a disgusting full-fledged lesbian as their spokeshomo, I won't go in the store for any reason.
Kinda like making Rosie O'Donnell the face of K-Mart...History repeats...
I had shopped at JC Penney off an on for years. After this guy took over and started his campaign against traditional values, I stopped shopping there.
——You have to get people into the store and then hope they’ll see things they just can’t live without that aren’t on sale.——
The loss leader....
When I was a kid, my dad used to take me grocery shopping on Saturday mornings. We bought every loss leader at four or five different supermarkets. It took about three hours. I thought it was normal.
Now that I think about it, maybe that’s why I hate grocery shopping.8-)
With a homosexual 'spokesperson"? No.
Now we order on line.
In a world full of Belks, Walmart, Target, and Kohl’s why do we need a JCP?
awesome. my co-workers are all wondering what I am laughing at...
You have to wonder just WHO is now behind the mirrors in JCP’s dressing rooms, and just WHAT they are doing? Say...what is that low buzzing hum..?
Being a Kohl's credit card holder (the only one besides my AmEx and Visa) I am sent coupons that you peel apart, revealing a discount- 15%, 20% or 30%- and I have gotten a 30% off in the past two mailers. They then give me an additional $10 certificate for every $50 I spend- on top of the additional posted discounts from usually 20-60%!! All of the employees are so friendly and seem so happy. Furthermore, I am not dragged into some radical political statement by some activist at the sacrifice of employees’ livelihoods just to prove a point that if you shove it in people's faces long enough, they will just accept you as normal.
Not the same thing!
You decide to shop at a place by going there...a proactive choice.
Amex usage is less “proactive” and the ads are less provocative...
(Lousey explanation, I know, but hope you get the idea...)
I remember the JCP store in my hometown had a pneumatic tube system to each sales desk. The clerk would put the sales slip and customer cash in a cylinder that would shoot upstairs to be reviewed by the manager.
Change from your cash and the approved sales slip would be fired back in about a minute.
Yeah, I know it dates me...
My wife bought $790 in furniture and approx. $425 in other items at JCP in Q4 2011. In Q1 2012 (the period reflected in the dismal results above)? NOTHING. She cut them off and will never but so much as a sock ever again.
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