...In 2007, shares of department store J.C. Penney (JCP) reached $80. In 2015, four years after a failed makeover attempt by former CEO Ron Johnson and the following struggle to keep the company out of bankruptcy, the stock trades for less than $10 per share. JCP has posted a net loss in each of the past four years, with revenues falling from $17.7B in 2011 to $11.9B in 2014. Even though progress has been slow, same-store sales are growing once again and revenue projections for fiscal year-end 2015 are $12.3B.1 A return to profitability would certainly be a positive development for the company and its shareholders, but there are a few major problems that will continue to keep J.C. Penney in the red. This paper will examine the problems faced by J.C. Penney using information collected from reputable Internet sites to draw a conclusion on solutions that would repair the company’s image and profitability. Brief History of J.C. Penney For over a century, J.C. Penney has been one of America’s leading retailers with steady growth since its opening in 1902. At its peak, JCP had 1,109 department stores operating in the United States and Puerto Rico. In addition to its brick and mortar locations, JCP.com was one of the largest apparel and home furnishing sites on the Internet and the nation’s largest general merchandise catalog business.2 Through these retail channels, J.C. Penney offers a wide array of national, private and exclusive brands, which reflect the Company’s commitment...
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...J. C. Penney operates department stores in the United States and Puerto Rico. It sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings. The Plano, TX-based company also provides various services, such as styling salons, optical, portrait photography, and custom decorating. The company offers various products and services online via its website, a platform that has been the nursery for industry giants like Amazon (AMZN) and eBay (EBAY). Its direct rivals include Kohl's (KSS) and Macy's (M), among others. J.C Penney's most recent quarter results least impressive among peers The company announced December quarter results on Wednesday, February 27, an event that sent the company's shares down the charts at Wall Street. The company's sales and revenues declined shamefully by huge margins. Revenues were down 25 percent for the quarter while Internet sales dipped 34 percent. On the other hand, Macy's online business soared 48 percent and looks set to take over what J.C Penney leaves behind. Last year, J.C Penney sent home 19,000 staff, and recently trimmed its workforce by 2,200 employees as it sought to cut fixed costs following a tough campaign. Customers are losing trust in the Texas-based company despite the massive experience garnered over the years. The company did not impress in terms of market share, with fewer than 17 percent approaching the retailer's stores. Contrary to J.C Penney, Macy's Q4 results tramped analyst...
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...J.C. Penny started off selling work clothes and shoes to mining families in Wyoming. The basis of the how the company conducts business was actually its initial name as James Cash Penney, named the company the Golden Rule, showing that they want to provide the customer a buying experience that a J.C Penney employee would want to receive as a consumer.?? (JCP.net) J.C. Penny grew from a small town store to multiple stores in the region by providing consistently high quality apparel that the whole family could depend on which attracted loyal customers. After expanding their stores throughout its existence, corporate headquarters has moved to Utah, to New York City, closer to the suppliers and consumers to decrease costs, then the latest moved to Texas because of the current lower cost of business compared to NYC. As Ron Johnson talks about a trouble company in JCPenny’s, he seems to be the most excited and in his element, seeing the opportunity for JCP to flourish (possibly add to this). He compares JCP to Apple when first joining the company, with the same market share, but with JCP having higher market cap, revenue, profit, and six times more customers, showing JCP is not as bad as what Apple was. Johnson started off in clothing retail, because he wanted to have a job he loved to do and that has shown to provide very positive results looking at the success of the last two companies he has left, with the businesses running very successfully. The new CEO explains that J.C. Penny’s...
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...Successful Change 8 References 11 Introduction JC Penney was a thriving retailer business that played on consumer’s emotions and made a consumer feel proud of themselves. JC Penney as a retailer created a buzz about themselves with their pricing strategy and coupons that they offered to their consumers. Consumers often discuss the sales and the great price of a sale of items amongst themselves. This was definitely a strength for this retailer. JC Penney was also a great place to shop for big and tall in a concrete building and store, not a catalog that was another appeal to their consumers. J.C. Penney was using a decentralized system of purchasing merchandise and inventory while other companies began to use centralize systems. To centralize the buying activities and revamp the stores, funds were needed. Funds were raised through the sale of JCP’s Direct Marketing Services, which sold insurance and travel and auto club programs. It led to a significant improvement of cash flow. The company then began to close down 120 of outlet stores that were under performing and sold its interest Eckerd drugstore chain to improve an influx of cash flow. J. C. Penney lost its edge over its competitor and started to lose money in the 1990’s and their investors were starting to get weary and the shares were plummeting from this event. J. C. Penney only hired from the inside until the end of the 1990’s. J. C. Penney has undergone major changes at different time periods and the...
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...Introduction Mr. James Cash Penney Jr. was born on September 16, 1875 to the parents of James Cash Penney and Mary Frances Paxton in Caldwell County, Missouri (Elizabeth, 2010). Mr. Penney got his start in retail business on April 14, 1902 by becoming one-third partners in a New Golden Rule Store. His partners were Thomas M. Callahan and W.Guy Johnson (Elizabeth, 2010).Mr. Penney partners sold their interest in three Wyoming stores in 1907. Four years later, January 17, 1913 the J.C. Penney was incorporated. It started out with 34 stores and 20 shareholders (Elizabeth, 2010). The shareholders were store managers, former partners, Mr. Penney as the president and major shareholder. JC Penney became a public traded listed company on the New York Stock Exchange in 1927 (Encyclopedia Britannica, Inc, 2012).The headquarter is located in Plano, TX, and operates in the United States and Puerto Rico, with more than 1,100 stores and counting. JCPenney merchandises include Women’s, Kid’s, Home, Shoes, Men’s Clothing, and Bed & Bath. My role is an organization consultant. I will provide new idea to JCPenney on how they can become more profitable to consumers again. To improve sales and their image, JC Penny close their catalog business, outlet stores, exit the drug store business, and closed under-performing stores (Booten, 2011). With this reformation, many people were laid off. Problem Statement JCPenny had set the top company priority as making sales for the quarter. With downsizing...
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...fall of 2011 Ron Johnson was appointed CEO of JC Penney and also the savior responsible for breathing new life into one of the oldest American retail stores. Seventeen months later and many, many mistakes later, he was out of a job (Tuttle, 2013). You may ask why? The answer to that question is simple in a way, sales for JC Penney were decreasing and the weak sales cost JcPenney to exit the catalog business and close 19 of its catalog outlet stores. An additional seven stores, two call centers, and one customer decorating facility were closed as well (Heller, 2011). Johnson came out the corner swinging in the early 2012, he announced a major overhaul of the way JCPenney does business with a new “fair and square” everyday low pricing scheme to replace the “fake prices.” (Tuttle, 2013) The idea seems great but that wasn’t what the customers/consumers wanted. Yes, it seems realistic with all the fuss over “fake prices,” but the data didn’t come back successful at all. The first quarter after the installment of “Fair and Square,” sales declined 18.9 percent. Total sales decreased 20.1%, and Internet sales through jcp.com were $271 million in the first quarter, a 27.9% decrease from last year. Overall the store reported they lost $163 million net loss in the quarter (Tuttle, 2012). The idea made logical sense, but shoppers aren’t logical. They’re often drawn to stores not by promising low prices but by the chances of catching a deal with coupons or prices. During Johnson tenure as...
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...J.C. Penney’s Real Problem: The Shrinking Middle Class * Rita McGrath April 12, 2013 Ron Johnson’s office seat has barely cooled off following his departure as business observers everywhere dissect what went so dreadfully wrong at J.C. Penney. The former Apple executive was too Silicon Valley for the Plano, Texas, retailer. He was arrogant. He didn’t test his ideas, maintaining the Apple mantra that customers don’t know what they want until you show it to them. He approved marketing campaigns that told loyal Penney’s shoppers that “you deserve to look better,” basically telling them that they looked less than glamorous wearing the brand they had trusted and been comfortable with for years. He hoarded information so that individual store merchandisers didn’t know how various lines were performing. He mocked J.C. Penney’s ways of doing things. He abandoned the discounting customers had come to expect from retailers. And he, and most of the team he recruited, were commuter leaders, jetting back to California after cramming in marathon work sessions at headquarters. These factors certainly couldn’t have helped. I think, however, there’s one major reason behind J.C. Penney’s sudden swoon that not enough commentators are picking up on. There’s one big reason JCP would never be “Bloomingdale’s for the mass market,” as Johnson wanted it to be, and that’s because the mass market is gone. Because the middle class is gone, or at least rapidly going. This reflects a troubling development...
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...Conduct Business Research: Part 1 J.C. Penny J.C. Penny Corporation, Inc., is an American retail company that was founded in 1902 by James Cash Penny. The company was called J.C. Penny Stores Company from 1913 to 1924 and then was reincorporated in 1968 to present as J.C. Penny Co. The firm was incorporated in 1913 and the following year the company moved its headquarters to New York City. In 1927 J.C. Penny Co., became a publically traded corporation. J.C. Penny Co. has been a household name for decades, but has seen its share of financial difficulties. Now the company is in the process of changing their culture, as it has discontinued its traditional catalog sales, and created a profitable internet shopping site. The issue that J. C. Penney is facing includes dramatic losses in sales, profits, and stock value. They recently hit a 55 week low with their stock value. They have brought back a former CEO Myron Ullman III to make some changes which does open the door for some new possibilities as well. They are currently making changes by closing 33 stores that have been underperforming to make up some of those losses and project that to make some significant differences. Other issues that come with that are the 2,000 employees that will be laid off as a result. They are battling some tough situations with the economy not in the best place for the retail business while trying to still keep their footprint as a company. Former CEO, Ron Johnson had implemented sales and promotions...
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...Financial Analysis FIN 534 Financial Management February 2015 In the history of retail department stores in the United States, very few companies have had the success and notoriety that J.C. Penney Company has made throughout our lives. With the exception of Sears Roebuck and Company and Macy’s, J.C. Penney is one of the more well-known companies of all time in the retail business. J.C Penney, formerly known as Penneys, is a chain of department stores that are based in Plano, Texas. The first store opened in 1902 in Kemmerer, Wyoming by a local entrepreneur, James Cash Penney. In 1912, the company had expanded to 34 stores mainly located in the Rocky Mountain States. The original name of the stores was The Golden Rule Store until the company was incorporated under the name of J.C. Penney Company in 1913. In 1914, the company moved its headquarters to New York City to help with the simplification of financing, transportation and the simplifying of buying goods and merchandise (J.C.Penney). One important milestone for the company was the opening of their 500th store in 1924 in Hamilton, Missouri, James Cash Penney’s hometown. The year 1940 was also an important moment in retail history when Sam Walton began working for J.C. Penney in Des Moines, Iowa. Mr. Walton later went on to become one of the biggest entrepreneur’s in modern retail history with his Wal-Mart franchise. The company now has over 1100 department stores throughout the United States and also Puerto Rico (J...
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...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory JoinSearchBrowseSaved Papers Home Page » Business and Management Jc Penney In: Business and Management Jc Penney 1. I feel J.C. Penney’s strategy is to do with away constant “sales” and have every day lower prices. I also feel that Penney’s will favor the promotion of brand names and doing away with in-house labels. 2. Yes I think Penney’s has a good strategy for growth. The new CEO Ron Johnson is providing direction and encouraging new ideas. By using the “apple” model for Penney’s he is incorporating new ideas. Mr. Johnson is trying to develop a competitive advantage by changing the way Penney’s does business. His ideas are innovative and are being responsive to customers. Finally by offering brand names he is promoting quality over cheaper in-house labels. 3. Ron Johnson has established the mission and vision with his vision on how Penney’s needs to change to become competitive. He has established the grand strategy by assessing Penney’s current performance and lays out the game plan on how the mission will be accomplished. Mr. Johnson has clearly formulated his strategy by analyzing Penney’s internal problems along with the problems they have are facing from their competitors. Penney’s is currently n the strategy implementation part of the process this will take much investment but cost cutting and the elimination of sales have...
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...J. C. Penney was charging full price for items that were on sale and collecting sales tax on items that were nontaxable. He was terminated and had a lawsuit filed against for coming forward with the information. What is Whistleblowing? Whistleblowing is the attempt of people who work for a company reveal unethical or illegal activities. Whistleblowing tries to make others aware of activities that are considered illegal and unethical. When the wrongdoing is reported to someone within the company, it is considered to internal. However, internal whistleblowing is tends to less effective to the company. On the other hand, there is external whistleblowing. This is where the wrongdoing is made public by going to the media. Therefore, going public tends to be more effective and cause the company bad publicity. Whistleblowing can be personal or impersonal. Personal is when the wrongful act affects the whistleblower alone. Impersonal is when wrongful act affects others. Many people whistle blow for two reasons: morality and revenge. Morality is the biggest and best reason for this act because people generally should want to be moral and ethical. Whistleblowers should keep in mind that once they blow the whistle there are consequences, such as termination, blacklisted and lawsuits. A few individuals are strong enough to blow the whistle. Whereas, many people would not because of fear. In this case, Robert Blatchford, the whistleblower was terminated for going public about J.C. Penney...
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...J.C. Penney is next in line in the retail industry to report earnings, as results will be announced tomorrow before the market opens. The Macy’s competitor has boasted positive sales growth in the past few quarters and analysts are expecting the trend to continue. While the retail industry is hurting, and Macy’s earnings were everything short of good, JCP couldn’t be happier as its outlook has a bright spot because of a larger than expected increase in sales. The retailer is nowhere what it used to be just several years ago and has been surpassing analyst expectations in 6 of the last 8 quarters, but this earnings report will plainly define the future of the company. This coming holiday season is ever important, as the Estimize Analysts are hoping to see a loss of 55 cents per share and revenue of $2.863 billion while Wall Street analysts are less optimistic, estimating a loss of 60 cents per share and revenue of $2.864 billion. When J.C. Penney announced a growth in sales of 6.4% for last quarter, investors and analysts were surprised to say the very least. Under CEO Terry Lundgren the company has been slowly digging itself out of the failures of former CEO Ron Johnson. Through a reintroduction of item promotions, the gentrification of brands carried, a partnership with Sephora, an advanced online shopping site which employs a pick up in store feature, and a serious focus on...
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...STRATEGIC ALTERNATIVES In January 2012, newly appointed CEO, Ron Johnson introduced a plan to rebrand the department store chain into a 21st century retail powerhouse. Launching of the new J. C. Penney brand identity was set to occur over four years and would include a new logo, a new in-store experience featuring new and transformed brands, and most importantly, it would change the way that the company priced merchandise. Unfortunately, J. C. Penney suffered a 25% sales decline in the first year and Johnson was fired after only 17 months. Historically, J. C. Penney’s strength had been communicating the relationship between quality and value, in a way that the customer could understand. J. C. Penney lost this connection when we introduced a complicated, three-tier pricing strategy that eliminated the use of promotions and coupons. Despite research-supported ideas and the conscious rebranding efforts, we have failed to generate the urgency and excitement required to win the support of customers and employees. Poor messaging regarding the rebranding, paired with miscommunication between the company and our customers, has left us in a major financial bind and business crisis. With the reinstatement of former CEO, Mike Ullman, we find ourselves at a strategic crossroad and the Board of Directors has made the decision to explore and evaluate strategic alternatives. We are soliciting your expert advice in creating a more cohesive image through one of the following approaches: ...
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...Benchmarking Composition By Kelli Schroeder I chose JC Penny and Harley Davidson as my two companies to research for this assignment. JC Penney was founded in 1902 with the opening of its first stores along the west coast in small mining towns. It was popular because it brought goods at “one fair price” and also led the way to bring east coast fashions to the west. In 1963 JC Penney mailed the first catalogs out to customers in eight states and paved the way for the mail order business. What made this company strong, fashion at a fair price, was lost among the plethora of items from cookware to scarves that they now sold by mail, and later in stores. ("International directory of," 199) The early nineties brought struggles of competition with lower end stores like Wal-Mart and midrange stores such as Kohl’s. JC Penney found their merchandise had become diverse like Wal-Mart; however, their prices were higher like their competing boutique stores. Product value was perceived by consumers to be suffering. Profits for the more than 1200 stores fell two percent in only one year, leading JC Penney in have the worst performance of its peers in 2011. (Clifford, 2012) Harley Davidson has also struggled with the same issue of losing itself amongst fierce competition and diversification. Harley-Davidson began in a shed in 1903 by two brothers who set out to make the best American made motorcycles that money could buy. As Harley-Davidson became more successful, management decided to expand...
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...J.C. Penny Corporation, Inc. Company Analysis and Prognosis Tasha Liberman CASE STUDY BACKGROUNDER #2 MGMT 498 nd July 22 , 2013 Table of Contents Introduction .............................................................................................................................. 1 Company & Industry Background...................................................................................... 1 Company Strategies ............................................................................................................ 1-2 Current Financial Performance.......................................................................................... 2 Financial Performance Compare to Sub-Sector ........................................................ 2-3 Primary Macro-Level Forces ............................................................................................... 3 Micro-Level Forces.................................................................................................................. 4 Primary Strengths and Weaknesses ................................................................................. 4 Risk and Rewards Potential................................................................................
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