Ron Johnson Is Destroying JCPenney

[elistan]

Originally Posted by ILikeTurtles

You are a retailer's wet dream!

Indeed. Sadly, most shoppers are easily manipulated. I prefer JCP's new pricing. I'll be sad to see it go.

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Originally Posted by mmcc

But do you really think JCP is selling that cheap stuff with less markup than everyone else? In other words, is that $15 JCP shirt really the same quality that everyone else tries to sell for $80?

Yes, it really is the same in my experience. The price of a square yard of cotton doesn't vary by that much, and those $80 shirts are still made overseas for a very low labor rate.

[ThisIsNotMe]

I was at the mall to go to Nordstroms and buy a new suit.
Last time I was there JCP was doing construction so I thought I would check out the work.

I can say as someone who doesn't shopped at JCP their "store within a store" concept is VERY impressive.

The only section of the store that had its renovations fully complete (in the mens section) was the jeans section. It was layout/decor was very hip. Complete 180 from past JCP experience.

I think that JCP products are crap compared to what you can get at Macys for the same price and that is why I do not shop there but the new in store image would definitely make me think twice and if I didn't have pre conceived notions about the store I might even buy something.

I will honestly say that I am excited to see the store when it is fully renovated. Very impressed compared to what it was.

Hope that shareholders and customers will give Ron Johnson enough time to fully implement his vision.

[turtle777]

JCP was dead before Johnson arrived, so he might as well go all in.

I wish them best of luck.

-t

[shulerg]

If the stock gets down to the low or mid-teens, I think it will have been oversold, as the value of their real estate assets alone are greater than the current stock price reflects.

I'm not sure Ron is as brilliant as everyone thought he was at Apple, but he deserves time to implement his vision.

[jasazick]

I like the new strategy and the new ads.

That said, my local JCP still looks like a hung over TJ Maxx. They need to renovate the stores pronto.

[DakotaGuy]

Originally Posted by jasazick

I like the new strategy and the new ads.

That said, my local JCP still looks like a hung over TJ Maxx. They need to renovate the stores pronto.

The new strategy isn't working very well though. JCP recently released 2nd quarter results... Same store sales were down 21.7%, Total sales down 22.6%, and Internet sales down 32.6%. This is on top of an 18+% decline in the first quarter.

http://www.forbes.com/sites/ycharts/...uys-successor/

I don't think sales for any department store (even ones that went bankrupt) have ever fallen so dramatically. Johnson keeps saying that a turn around is just around the corner with a full renovation, but the fact is they don't have enough cash left to renovate all the stores.

I don't think Johnson understands the JCPenney customer and is trying to remake the store into an "Apple style" department store. The fact is the people who are attracted to the "Apple style" are not your typical JCPenney customer. Sure it is nice to attract new customers, but you have to find a way to attract them while keeping your current customer.

If these sorts of numbers hold through the holiday season and they have a huge loss in sales and income over Christmas I predict Johnson will be gone and JCPenney will be on the verge of bankruptcy. I notice lately he is starting to backtrack, but the damage might already be done for a company that is pretty weak financially. The question is do they have enough money and time to turn the ship around? I don't know. What is happening is sad and in the future we will probably be left with either very high end stores or Walmart.

[Carlanga]

I like the strategy and prices are better... JCP had ridiculous markups of the same products (Sears is another bad one) you could get at other stores for regular price when in JCP was 30-40% off 'special'. The only way good prices could be found was with using $10off 25/35/so on. The issue w/ the store losing more money is that the ship was already midway of being sunken and too late to prob. save.

I think in this age of technology where you can scan an item in-store from your phone and see other stores prices close by and even online ones w/ free shipping to your doorstep makes these old business models of inflating prices and giving what seems to be a good discount when is just 10% or less than normal obsolete. Shoppers are smarter & w/ tighter wallets and is one of the reasons I believe Johnson decided to go this route, it has nothing to do w/ apple style selling, but more updating to current models that can actually work.

I believe if it was a new megastore store w/ this pricing scheme, it would be working better than if it was called JCP.

[rdowns]

Ron Johnson's plan to ditch J.C. Penney’s ‘old lady’ store perception

Roughly 300 analysts and investors descended upon J.C. Penney’s secret prototype store in Dallas Wednesday as CEO Ron Johnson continued to reveal his plan to transform the department store chain.

The visitors, mostly from New York, traveled in tour buses from J.C. Penney’s Plano corporate office and gathered in a crowded space waiting for Johnson to appear.

“It’s like waiting for the President,” said one analyst who was getting anxious.

They’re all here to see a 30,000-square-foot mock up of what a J.C. Penney store will look like with unique branded shops. While Johnson obviously isn’t the president, his plans for J.C. Penney (NYSE: JCP), mainly to have 100 branded shops by 2015, are being watched closely.

“We’re not here to improve, we’re here to transform,” Johnson said. It’s a common slogan for Johnson.

That transformation could end up being a giant case study or it could, as Johnson says, transform the way America shops.

The prototype, which Johnson calls “an art project,” contains shops that already exist in 700 stores, like Levi’s and Liz Claiborne, but it also gives insight into what’s to come: wider aisles, self checkout, tables with iPads and coffee bars.

As analysts enter the space, Dallas-based Paciugo Gelato passes out samples and J.C. Penney’s recently announced Disney kids’ store is on display.

Executives such as Chief Operating Officer Michael Kramer and Chief Merchant Liz Sweney entertain analysts. J.C. Penney’s largest investor, and a cheerleader of Johnson, Bill Ackman, also works the room.
“It’s a fun day for us,” Sweney said.

Paciugo, along with Minneapolis-based Caribou Coffee, has not officially been announced as a shop in J.C. Penney stores, but it shows the potential of the variety Johnson would like to bring. Johnson, who created the popular Apple retail stores for Apple Inc. (Nasdaq: AAPL), compares the future J.C. Penney store to an iPhone.

“All those boutiques are the apps. What J.C. Penny is creating is a new interface,” Johnson said.

The old interface? It was old, dingy, outdated and low end, according to customer comments Johnson featured in his presentation – the fourth in eight months.

“This was my perception of J.C. Penney when I took this job,” Johnson said. “I think we all know that is a perception a lot of Americans have with J.C. Penney. It takes time to change people’s minds.”

Johnson said the shops are helping change minds, and comparable sales in shops are 20 percent better than the rest of the store.
“We want to be the world’s favorite place to put their brands,” said Johnson, adding that the company is even adding startups to its shop line up, like Giggle, a baby products company.

The jcp brand men’s store is one shop that has been trailing others.
“The colors might be a bit advanced, purples and oranges,” Johnson said.
But it’s the company’s attempt to get a younger customer and compete with fast fashion brands like H&M. Johnson believes the Joe Fresh shops are a good answer for that.

“We’ve got to get a younger customer, but that’s going to happen in an evolutionary way,” Johnson said.

The evolution is also going to come with more hard times for J.C. Penney, Johnson warned. He expects the back half of the year to be similar to the first two quarters. J.C. Penney reported a $147 million second quarter net loss in August.

“It ain’t gonna be easy. It’s going to take a lot of time, but that’s why we are here,” Johnson said. “The only way to be where we are was to have the courage to endure a year of transformation.”

[filmbuff]

All I know is that since the "Revolution" I can walk into a JC Penny and find exactly what I need, in my size, much cheaper than Macy's. Returns are easy. And I hate to shop, so the new layout is definitely a bonus.

[larig]

I was impressed when I went into a store a week ago. I haven't shopped there in ages, but I'll be a regular now.

[shady28]

Interesting thread. The new stores came out in late Aug / early Sept and it seems more positive responses here than 6-8 months ago.

I just wonder what the demographic here is though. It may well be than Ron J. has the Mac target audience pegged, but if that's all there is to it...

I also like to look at this as one of a plethora of litmus tests currently under way for the execs that used to work for Jobs. Were they brilliant, was it just Jobs, or maybe both?

[DakotaGuy]

Originally Posted by shady28

Interesting thread. The new stores came out in late Aug / early Sept and it seems more positive responses here than 6-8 months ago.

I just wonder what the demographic here is though. It may well be than Ron J. has the Mac target audience pegged, but if that's all there is to it...

I also like to look at this as one of a plethora of litmus tests currently under way for the execs that used to work for Jobs. Were they brilliant, was it just Jobs, or maybe both?

I have been following all of this since it started and things have only went from bad to worse when they released their their third quarter results a couple weeks ago. They lost $123 million, but that isn't really the figure you need to look at since a lot of department stores lose some money in the third quarter. What you need to look at is comparable store sales are down over 26%. Usually sales drops of 5% are enough to get executives concerned, but the rate they are losing customers is unheard of in the modern business world.

Now to Johnson's credit they are in the middle of revamping everything so some sales are likely to be lost, but I'm not sure what is going on here. They are attempting to rename JCPenney to jcp (note all small letters) which gives the store little identity even though I am sure Johnson thinks it is trendy. They have gotten rid of all sales, however decided to do a sale on Black Friday. It will be interesting to see if they go back to their policy of no sales before Christmas. I doubt it. Last, although it was a nice gesture to open last at 6 AM on Black Friday I'm not sure how that worked out for them. How many customers had long spent their money at other stores by then? Last year stores that opened later were hammered hard so that is why we saw so many open earlier this year.

One thing for certain is that Johnson has enough charm and people believe in him enough that he will either 1) Create one of the biggest turn around stories ever seen in retail or 2) Be steering the wheel as the ship goes down. One thing I have noticed in interviews is that he has all the arrogance of Steve Jobs when it comes to running the business, but JCPenney is no Apple.

I predict it will be a disastrous holiday season for jcp (That is sort of what they want us to call it now) however no matter what Johnson will carry on. The thing to watch is what happens in 2013. By that point they need to start regaining customers because you can't keep going losing over 20% of them each month.

[ravenvii]

It will be a difficult Christmas this year. Not might, will.

However, what Ron Johnson is doing is basically creating a completely new shopping experience. Transforming JCPenney into something else entirely. I went into a store recently. It's going through the transformation, such that the store is a mixture of the new and the old, so it's a confusing mess, which is why sales is down. However, what there is that is new is clear, easy to find and organized.

As for sales, the prices they offer sans sale is the same as the prices Macy's offer WITH sales. The idea that you're getting a good deal if it's on sale is so ingrained into the public's mind that this is actually failing.

Johnson has conceded as such, and will bring back 'sales' (read: inflate the "normal" prices, then bring it back down via a sale). Sad reality, but reality it is.

I might be biased in that I own JCP stock, but I really do believe Johnson can pull this one off. This kind of transformation doesn't take a day. Or even a year.

If things still look bleak in 2014, then I'll start to worry.

[stephaniehuang]

So far at least I like the changes. Yesterday I stepped in one new store and saw huge discounts there. At least it's still cheaper and good quality.

[NutsNGum]

Originally Posted by DollaTwentyFive

Ohhhhhhh Ron Johnson

Hahaha!

[fiddlestyx]

Regardless of how the company is doing, I have to say the stores look much nicer. JCP was stuck with the reputation of being drab and the place where old people go to shop for clothes.

It's nice to see JCP trying to change their reputation as its difficult to drive new sales. Changing their target audience will take a lot of work, but I'm still interested to see where they end up.

[DollaTwentyFive]

Originally Posted by NutsNGum

Hahaha!

I didn't think anyone got the talking cat/South Park reference