J.C. Penney Increased Its Advertising In 2012— But Sales Collapsed Anyway*

jcpenney ron johnsonJ.C. Penney CEO Ron Johnson

Photo: Astrid Stawiarz / Getty Images


JCP has been on a rollercoaster since former Apple guru Ron Johnson took over in 2011. Johnson changed the company’s logo, set about redesigning the stores, and — infamously — ended JCP’s rotating discounts and sales in favour of everyday low prices.

He accompanied it all with an ambitious, and expensive, rebranding campaign.

A big part of that campaign was advertising. 

Of its more than $1 billion ad budget for 2011, it spent:

  • $91.1 million on Network TV, according to Kantar Media
  • $53.6 million on magazines, and even more on newspapers, according to Ad Age.

In 2012, Network TV spending increased to $191.4 million. Magazine spending dropped modestly to $49.8 million, according to Kantar Media.

The increased overall ad spending came after JCP fired its ad agency, Saatchi & Saatchi at the end of 2011, after five years together. It brought in Peterson Milla Hooks. Its PR company, M Booth and Associates, was also set loose.

Did any of this pay off? Comparable same-store sales for the third quarter of 2012 declined 26.1 per cent and total net sales decreased 26.6 per cent, from $3.9 billion to $2.9 billion.

*This story originally included inaccurate data from MediaRadar, and has since been updated to reflect the correct information.

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