Photo: Yahoo Finance
JCPenney has been getting lots of criticism lately since it hasn’t been hitting its numbers.But there are some bulls, including Citi retail analyst Deborah Weinswig.
On CNBC this morning she spoke about how although JCP is losing a lot of market share to Macy’s, CEO Ron Johnson still has more time to prove himself.
She said “we want to wait and see what happens in August — that’s where we can really evaluate the report card.”
She also said that 2/3 of consumers are confused about the pricing, and JCP is starting to lose consumers to other retailers. But “the thing I really like about Ron Johnson is that he’s willing to change” his strategy if need be, she said. “Ron looks at this company as, ‘We’re a startup. They’re starting as a new company and startups don’t pay dividends. It’s not really a cash issue — they’re looking at this as a new company. [But] a lot of investors do expect dividends.”
Johnson announced huge plans for the company back in January, but not everything has gone as planned.
For one, its 3-level pricing strategy isn’t working. At the company’s Q1 earnings announcement — where JCP reported that it missed sales expectations by 15 per cent — Johnson said that he didn’t realise how addicted consumers were to coupons. In fact, he went so far as to say “coupons were a drug, they really drove traffic. [Customers] need to understand the value we’re offering.”
Since then he’s added “sale” back into the company’s lexicon, but he hasn’t brought back coupons.
The full strategy is still in the process of being rolled out — including the major in-store changes and integration of big-name partners like Martha Stewart, which are happening this fall — but investors want to see bottom-line recovery soon. Earlier this year UBS said that “Judgement Day” for JCP and Johnson would be in the second half of 2012.
What do you think? Is this a fair timeline? Let us know in the comments.
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