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05-16-2012, 07:37 PM #1
Former Apple Retail Chief Facing Criticism as JC Penney Stock Falls
After being JC Penney’s CEO for a little over six months on the job, former Apple senior vice president of retail Ron Johnson is already seeing criticism of the major overhaul he designed for the ailing department store chain as a recent earnings call revealed substantial losses. After leaving Apple in November 2011 to take charge of the department store, Johnson sought out to increase margins with the introduction of a new pricing model and unique retail ideas like the store-within-a-store, but customer response to the efforts fell flat according to Reuters.
JC Penney reported higher than expected losses during its first quarter 2012 earnings call on Tuesday with a 20.1% sales drop year-to-year causing shares to fall 19.7%, the worst decline since the company began listing shares in 1929. The selloff erased $1.43 billion in market value and was the catalyst for a suspension of the stock’s quarterly dividend of 20 cents per share. JC Penney shares closed down $6.57 on Wednesday to end the day at $26.75, well below the $30.11 closing price seen the day before Johnson was named CEO last year.
As of right now, the company is in the middle of a multi-year plan to revive sales, though some analysts see the change as being one that will be ineffective. The new strategy (spearheaded by Johnson) involves the replacement of coupons and sales with “Every Day” low prices. On Tuesday, Johnson told analysts that he stands by the changes but admits that JC Penney hasn’t been successful in conveying the benefits of its new plans to their customers. When asked about the company’s advertising plan, Johnson said “It is not doing the hard work we need it to do right now.”
While working at Apple, Johnson was responsible for the creation of Apple retail stores and the retail experience, which are main components of the success Apple has seen, with the retail stores generating $4.4 billion in the last quarter alone. We’ll have to see if Johnson can turn JC Penney around to a path of success much like he did for Apple.
05-16-2012, 07:50 PM #2
In all honesty I dont see why JC Penney even exists anymore, the stores are almost always barren of any customers, they specialize in probably the lowest/cheapest quality of merchandise available, and they worry about 'coupons' 'advertisements' and 'every day low prices'?
05-16-2012, 08:01 PM #3
05-16-2012, 09:11 PM #4
As for the stock drop... That is to be expected. Penneys has taken a dramatic change in business model and sales are suffering because of it. Once people realize that something at Penneys is lower in price everyday compared to $10 more at Macy's on sale. Sales will pickup. That's why all of these ads are trying to get into peoples heads that sales are a thing of the past and now prices are "fair and square".
05-16-2012, 10:24 PM #5
I too was extremely surprised when I got dragged there with the gf and her mother. I ended up buying more than both of them! They had really great prices and some really nice stuff. Idk nice atmosphere and the redesign looked great. Will shop there more often then the mall.
05-16-2012, 10:27 PM #6
Could it have anything t do with JCP shoving an alternative lifestyle down our throats the last few months.
No. Not at all.............................
Its your life. Live it how you want to.
05-16-2012, 10:32 PM #7
When I need to buy anything past a tshirt or jeans, I go to JC Pennies. The problem is that I don't do that often and I hate spending a lot on clothes. That being said, I'm not everyone. I hope they stay around. Too many department stores have closed up shop. Are they a relic fighting to stay alive, no. But when you had so many different ones, some had to fall and at least one will remain.
05-17-2012, 07:23 AM #8
05-17-2012, 09:07 AM #9
Hopefully over the next few years Penny's will pick back up. Even though I don't shop there anymore it's still a good store with some good prices. But mostly I just want to see Ron Johnson successful with his new job.
05-17-2012, 10:47 AM #10
I haven't been in a JC Penney since he took over. Is there much of a change? Maybe I'll check it out today, see if there're any deals.
Maybe it's the name. JC Penney sounds so outdated. "Apple" is hip and cool. Everyone likes fruit. JC Penney sounds like a dirty coin.
05-17-2012, 03:24 PM #11
05-17-2012, 03:32 PM #12
That's what he was talking about.
Last edited by Mainevent94; 05-17-2012 at 03:34 PM.
05-18-2012, 06:04 AM #13
05-18-2012, 08:03 AM #14