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JCPenney stumbled in the first quarter of its turnaround attempt under former Apple retail chief Ron Johnson, and things aren’t going to change any time soon, according to a note from UBS.UBS says there’s little reason for traffic to improve significantly in the near-term.
Why not? Well, JCPenney’s traffic took a beating in the first quarter, plummeting 10 per cent. Marketing initiatives have been lackluster so far, and the big shop-in-shop changes are still three months away.
Johnson was adamant in his defence of the strategy to rid the chain of coupons in his Q1 presentation this week, and said that he’s now altering his marketing strategy to help wean people off of them. Aside from that, not much will be changing at JCPenney until those shop-in-shop changes occur.
UBS also says that JCPenney has the opportunity to defend by amping up its “Month Long Value” offering to kick sales up a bit.
Still, everything hinges upon getting people to buy into the “Everyday Value” idea and ditch their beloved coupons.