We went to JCPenney to see why sales are sinking — and it revealed why giant mall-based department stores are dying

Business Insider/Hayley PetersonSome of JCPenney’s stores are outdated and messy.
  • JCPenneyCEO Jill Soltau said last week that the company is failing to adequately deliver on some fundamentals of “good retail.”
  • We visited two mall-based JCPenney stores in Richmond, Virginia, and found empty shelves, messy displays, and abandoned cash registers.
  • Then we visited a third JCPenney in a strip mall, and we were blown away by the flawless design, layout, and presentation.

JCPenney CEO Jill Soltau said last week that the department-store chain is failing to adequately deliver on some fundamentals of “good retail.”

Soltau made the remarks on an earnings call in response to a question about what she’s learned since taking the helm at JCPenney in October, just two weeks before the start of the critical holiday quarter, during which JCPenney’s same-store sales fell 4%.

We recently visited two JCPenney stores in Richmond, Virginia, and saw empty shelves, messy displays, and abandoned cash registers. The stores, which both anchored enclosed shopping malls, felt outdated and far too large.

Then we visited a third JCPenney store in a strip mall, and we were blown away by the flawless design, layout, and presentation:


First, let’s tour the shopping-mall-based stores.

Business Insider/Hayley Peterson

We spotted clearance signs throughout these stores, signalling the company’s ongoing efforts to clear out inventory, which Soltau discussed on the earnings call.

Business Insider/Hayley Peterson

These efforts seemed to be working a little too effectively in the shoe department of one store.

Business Insider/Hayley Peterson

Many shelves in this department were entirely empty.

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Others were sparsely decorated with boxes and shoes.

Business Insider/Hayley Peterson

We also found dozens of “sale” signs offering steep discounts throughout the stores.

Business Insider/Hayley Peterson

Soltau called the company’s pricing strategy “confusing” and said “you might not know exactly when you can get the best value at JCPenney, which, in fact, every day you should be able to get a great value at JCPenney.”

Business Insider/Hayley Peterson

We found several unattended checkout registers that appeared to be permanently closed.

Business Insider/Hayley Peterson

Signs covering these closed registers encouraged shoppers to visit the company’s website.

Business Insider/Hayley Peterson

Several fitting rooms throughout the stores were closed as well.

Business Insider/Hayley Peterson

Moving on to the handbag department, we found more signs offering steep discounts …

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… and a messy display of bags.

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Some tables were overflowing with bags …

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… while other areas featured near-empty shelves.

Business Insider/Hayley Peterson

JCPenney said accessories and handbags were among its worst-performing categories during the holiday quarter.

Business Insider/Hayley Peterson

A few steps away, we were met with this crumpled sign at the jewellery department.

Business Insider/Hayley Peterson

The jewellery department also featured a piece furniture that was packed inside its shipping box.

Business Insider/Hayley Peterson

This appeared to be a theme throughout the stores.

Business Insider/Hayley Peterson

Displaying boxed furniture could be an attempt to fill empty floor space or reduce employees’ trips to the back room.

Business Insider/Hayley Peterson

The Sephora concept was a major bright spot in both stores. It was well-lit, well-stocked, clean, and creatively merchandised.

Business Insider/Hayley Peterson

Soltau said she recently met with Sephora’s new CEO, Jean-André Rougeot, and “had a very exciting conversation.” “We see great things for Sephora inside JCPenney as we move forward,” she said.

Business Insider/Hayley Peterson

JCPenney said apparel was among the strongest performing categories during the holiday quarter.

Business Insider/Hayley Peterson

But we were underwhelmed by the apparel displays in the shopping-mall-based stores.

Business Insider/Hayley Peterson

Some racks were stuffed with mismatched items, such as athletic shorts and sleepwear.

Business Insider/Hayley Peterson

Other racks were nearly empty.

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We saw stained carpets, too.

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In many parts of the stores, it seemed like employees had tried to spread out inventory to cover up what would otherwise be empty wall and floor space.

Business Insider/Hayley Peterson

This may soon improve. JCPenney is in the process of removing major appliances from its stores because of lacklustre sales.

Business Insider/Hayley Peterson

As appliances are removed, JCPenney is exploring new layout options, including the reduction of store space, the company said.

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“While configurations will vary by store, we are finalising new layout options, including the possible reduction of store space previously dedicated to appliance and furniture showrooms,” Trent Kruse, JCPenney’s senior vice president of finance, said on the company’s earnings call.

Business Insider/Hayley Peterson

He said these measures aimed to “maximise efficiencies, reduce inventory and create an enhanced experience that inspires repeat shopping trips and customer loyalty.”

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It seems like reducing store space could solve a lot of the problems we spotted during our first two store visits.

Business Insider/Hayley Peterson

But the company also has to find a way to draw in more customers. We didn’t see many shoppers during our visits to the mall-based stores.

Business Insider/Hayley Peterson

“Our customer wants us to be restored to greatness,” Soltau said on the earnings call, adding that customers have “great memories” associated with the “storied” JCPenney brand.

Business Insider/Hayley Peterson

“We just have to be better and improve how we are showing up for her shopping experience and what we are selling,” she added.

Business Insider/Hayley Peterson

Our first two store visits left us feeling sceptical about the company’s future and its ability to win back customers.

Business Insider/Hayley Peterson

Then we visited a JCPenney store in a strip mall. We were blown away by this store from the moment we walked in the door.

Business Insider/Hayley Peterson

The demographics of the areas around all three stores were similar, and they were all within a 15-minute drive from each other.


It appeared to be less than half the size of the previous two stores we visited.

Business Insider/Hayley Peterson

And it looked nothing like them.

Business Insider/Hayley Peterson

The store was bright, updated, and immaculate.

Business Insider/Hayley Peterson

The floors throughout the store glistened, and there was a steady flow of customers in most departments.

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Each branded store-in-store concept, such as this Levi’s display, featured unique lighting fixtures.

Business Insider/Hayley Peterson

There were no empty racks or obvious holes in the displays.

Business Insider/Hayley Peterson

Backlit shelving lined the walls of the handbag department and made this section of the store feel high-end.

Business Insider/Hayley Peterson

All the handbags on display were meticulously arranged. Nothing seemed out of place.

Business Insider/Hayley Peterson

We were stunned to find this level of tidiness carried over to the accessories department.

Business Insider/Hayley Peterson

Small accessories are difficult to keep tidy in retail stores, even for the best-merchandised stores in the business.

Business Insider/Hayley Peterson

We were also impressed by the shoe department.

Business Insider/Hayley Peterson

This department was clean, organised, and had few empty shelves.

Business Insider/Hayley Peterson

We didn’t find any cardboard boxes clogging aisles in this store, unlike the others we visited.

Business Insider/Hayley Peterson

JCPenney appears to thrive in a smaller store layout, like this one, that isn’t tied to a shopping mall. It doesn’t just look better; it’s also more convenient to shop because of the smaller size.

Business Insider/Hayley Peterson

The stark differences between the first two JCPenney stores and this store highlight the struggles that department stores have faced to remain relevant and well-merchandised in giant, outdated, shopping-mall-based locations.

Business Insider/Hayley Peterson

These store visits also show that under the right conditions, JCPenney is capable of delivering flawlessly on the fundamentals of great retail. The fate of the company now depends on its ability to execute this shopping experience across its entire fleet.

Business Insider/Hayley Peterson

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