Things have gotten so bad at JCPenney that analysts are now worried about a cash crisis. Ron Johnson has been CEO for almost a year now, and the retailer isn’t doing well. Sales are down, customers are confused and the company could be headed for financial problems.
While the “shop-in-shops” are doing well, those won’t be completed until 2015, reports Vicki M. Young at Women’s Wear Daily. Until then, JCPenney needs a turnaround strategy for its core business.
Johnson’s latest strategy is making it easier for shoppers to do price comparisons while they shop, showing “suggested price” alongside “retail price” to show the value. The company will also break its “no-coupon” rule and have a series of promotions, including on Black Friday.
The company’s management is hopeful that changing up JCPenney’s marketing and promotions will help the retailer regain lost foot traffic.
Johnson said the company’s horrible quarter was a “learning experience.”
“But the real lesson to me was that the customer, not just outside of the store, needs to understand the value. When they walk through the store, they want to understand the value of what they buy,” Johnson told analysts last week.
An analyst told WWD that JCPenney is going through growing pains, but will likely succeed in the end.
“Investors will be patient. They don’t have to buy the stock today. This is a stock you want to own next Christmas. I think the plan will work….For this year, it will be a tough Christmas,” the analyst said.
While it goes through growing pains, JCPenney’s challenge is two-fold: attracting new, value-conscious customers while keeping its old customers happy.
If there’s a man who can do the job, it’s the brilliant Ron Johnson. But it’s possible that this turnaround might be too difficult pull off, even for him.
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