J.C. Penney Is the New Sears: Ron Johnson Has Done “Incalculable Damage,” Davidowitz Says
Source: Daily Ticker
"J.C. Penney (JCP) shares tumbled Wednesday after the retailer reported a much wider-than-expected first-quarter loss, suspended its dividend and saw weakness across all core metrics.
In an apparent rebuke to new CEO Ron Johnson's strategy to change the company's focus from discounts to everyday low prices, total sales fell 20% while same-store sales declined 19% and gross margins fell to 37.6% from 40.5% as foot traffic in the stores dropped 10%.
"Our marketing isn't doing the work," Johnson said in a conference call. "We've got to get our pricing across. Coupons were a drug, they really drove traffic. [Customers] need to understand the value we're offering."
But it's Johnson, not J.C. Penney's customers, who has a problem understanding what the retailer needs, says Howard Davidowitz, a veteran retail banker and CEO of Davidowitz & Associates.
"He's caused incalculable damage," Davidowitz says of Johnson, who joined J.C. Penney last year after running Apple's (AAPL) retail operations. "The customers are everything. They don't know what the hell he's doing."
Read more: http://finance.yahoo.com/blogs/daily-ticker/j-c-penney-sears-ron-johnson-done-incalculable-160736591.html
One million moms will probably take credit for the sales drop, they're taking credit for getting low rated shows cancelled
Sherman A1
(38,958 posts)One million Moms may or may not take credit, but it was a bad management decision with a flawed marketing scheme that did the trick here. Unless they change their direction, one suspects they are doomed.
Itchinjim
(3,085 posts)They never learn.
Sherman A1
(38,958 posts)MINNEAPOLIS Target Corp. here said Wednesday that strong apparel sales and a better mix of higher-margin product helped boost profit margins in the first quarter.
As previously reported, Target posted a 5.3% gain in comparable-store sales in the three-month period, which ended April 28. On Wednesday the company said its net income for the quarter was up about 1.2%, to $697 million. EBITDA in the retail segment was $1.7 billion, up 8.5% over year-ago results. Retail sales for the first quarter were up 6.1%, to $16.5 billion.
Related story: Impact of Target PFresh Seen as Minimal
In a conference call with analysts on Wednesday, Kathryn A. Tesija, executive vice president of merchandising, said a range of factors contributed to the improved profit margins, including private-label growth, price optimization, customers trading up to higher-margin brands, and inventory controls.
The improved margins came despite an increased mix of lower-margin consumables. The company now has more than 1,100 discount stores remodeled with a broader assortment of grocery products under the PFresh initiative.
Target increased its profit outlook for the year by 5 cents per share, to a range of $4.60 to $4.80.
http://supermarketnews.com/retail-amp-financial/target-boosts-q1-profits
So it appears that there is money to be had out there in retail, just the JCP can't figure out how to get it.
Ilsa
(61,710 posts)system. I didn't like having to sort through those big red coupons, tote them around, circle dates on calendars to use the coupons. Everyday low prices works really well for me.
vankuria
(904 posts)Could have used those when I bought new bedding recently. May-be the coupons had some psycological value to me and other consumers, knowing whatever price something is you would get an additional discount when you get to the register. Penney's also used to send me $10 and $15 coupons all the time, haven't gotten either since they started this new way of pricing. I miss the old Penney's used to do all my shopping there. Being on a budget I've switched to Kohl's, their 15, 20 and 30% coupons mean big discounts at the register, on top of the fact that most of their stock is already on sale. When you make your purchases your reciept tells you how much you've saved, which is a very positive way to market. Most consumers have to go where the best deals are.
renate
(13,776 posts)I was looking for a local news story I'd watched about how Kohl's marks up their original prices when they have a sale, but apparently it doesn't only happen in my area (Portland, Oregon):
http://sacramento.cbslocal.com/2012/02/06/call-kurtis-investigates-mark-up-to-mark-down/
SomeGuyInEagan
(1,515 posts)That said, with what seems like a sale every weekend, the Kohls employees must spend most of their time Mondays through Thursdays repricing stuff on the shelf.
jmowreader
(50,580 posts)Hence cutting out the chore of running around manually resetting prices on the shelves.
vankuria
(904 posts)not just Kohl's. They're in business to make money and anyway they can they will. Even so, I have found great bargains at Kohl's as i do alot of comparison shopping. Between coupons, including $10 off coupons, it's a good deal for my family.
joeglow3
(6,228 posts)Their regular prices are usually so much higher than EVERYONE elses. Thing is, walk in the store and 98% of the racks have a "sale -20% off" sign on them. Thus, this article confirms what I already knew to be true.
IndyJones
(1,068 posts)Their prices are higher, too. The dinnerware set I want is $100 there, one of their "Everyday Low Prices". Not really very low, IMO.
spooky3
(34,518 posts)It's the merchandise quality that does not work for me. I like to buy non-faddish clothes that will last and will pay extra for them, but those are impossible to find these days.
Avis
(150 posts)The reason to go to Penney's was that they offered good quality at a reasonable price. I have two pairs of socks, same brand, color, etc.. and vastly different in quality. If Penny's is no different than Walmart, there is no reason to go there. Why do we have to have disposable everything, even clothing.
SomeGuyInEagan
(1,515 posts)... by design or by choice (or a mix of both). But these days, it seems most clothing is made to last little more than a season or two (with care) before it fades or falls apart. While this makes for some items being less expensive in real dollars than the same items cost 20 years ago, it seems to be true even with much of the higher priced clothing items.
JDPriestly
(57,936 posts)for some years. I was happy with what I bought, and I found some sweaters I really liked -- simple colors, classic styles.
JDPriestly
(57,936 posts)I don't collect coupons. I shop prices.
I wanted to buy a certain item which I won't mention here.
I went to Macy's. They had a sale of 3 for a certain price. I didn't want to buy more than two and, anyway at Macy's, I could not find two of the type I wanted in my size.
So I traveled a little further and went to J.C. Penney's. There, the item was priced higher per piece.
But when I did the math, I realized that the Macy's sale and Penney's regular price were the same. But I could save money at Penney's because I did not have to buy three of the same thing. At Penney's I did not have to buy something that did not fit me in order to get the lower price.
As for coupons, they are fine for a family because you have to shop often and buy a lot, but you don't really save much money if you are just a couple and you aren't spending much or buying much. That's why I think with our aging population, Penney's is on to a good thing.
Besides, I shop at stores like Trader Joe's where the pricing system is the same as Penney's -- low prices every day. You just shop. You don't have to read the ads before you go.
I fell in love with Penney's new pricing right away.
But their stores are too big for that pricing strategy. I saw the article criticizing Penney's yesterday.
Apparently Ron Johnson is planning to divide his stores into little boutiques. I think that will work well and correct the problem with the stores that make you feel lost.
I think they should start calling Penney's "J.C.'s," not Penney's.
No. I don't work for Penney's. I just like the store because of my experience. It's like shopping at Trader Joe's. You don't have to spend a lot of time reading the ads and waiting for the right price and a coupon. You go shopping with a list of what you want, and you come out with a good deal. That's what I like.
This is not an ad. People who know me on DU know that I state my opinion and that I am retired.
But I do have to say that one of my great-aunts (whom I did not know well) worked for Penney's way back in the day. And I bought the first fabric for my first sewing project in junior high school from Penney's -- a pink print with little flowers on it. That was in the 1950s. It lasted forever. (Unfortunately, because I was not a great seamstress, and I do not look good in gathered skirts).
renate
(13,776 posts)I also like your idea of calling it "JC's"--more modern, less cheap-sounding.
I think a combination of low prices plus occasionally sending out $10 gift certificates or something like that might hit both sweet spots for people who prefer reliably low prices like you and me and for those who like to get a deal (like you and me, too, come to think of it).
JDPriestly
(57,936 posts)high density
(13,397 posts)I really like that I can now go in at any time and get a decent price.
It is sad though when I compare my local JC Penney store at one side of the mall to the Macy's on the other... The JC Penney is practically a ghost town and the Macy's is noisy and bustling with people.
I hope JC Penney finds a way through this.
vankuria
(904 posts)I know some shoppers don't like to be be bothered with them, but I would bet there are more that love them, than hate them.
Lars39
(26,117 posts)of my husband's wardrobe, Savane khakis. I wonder what other staples they've dropped.
The Green Manalishi
(1,054 posts)aren't what they used to be and the selection is poor these days. Used to be I could get a decent looking, long lasting dress shirt in my size for a reasonable price. Now the men's department here (Santa Rosa, CA) looks like no one has been stocking or straightening for months. And the sales clerks told me that they did a 'Circuit City' trick, cut everyone's hours to part time (no more benefits) and got rid of the best, most highly paid people.
Lars39
(26,117 posts)Switched over to Dillard's Gold Label shirts. Cost the earth, but *never* have to touch up and they resist stains, too.
CBHagman
(16,992 posts)The inserts turn up every week in the paper, and I have to admit the color J.C. Penney brochure is very smoothly put together...and utterly soulless. It feels as though they're trying to market an image, not sell clothing.
high density
(13,397 posts)Soulless is a great way to describe them. I might have spent a couple minutes flipping through the old style ones... The new style ones go right into the recycle bin.
The brochure we get weekly either in the paper or by mail is very slick. I'd imagine it's costing them a fortune and obviously not increasing sales. If they could cut back on their useless advertising perhaps they could pass the savings on to consumers.
originalpckelly
(24,382 posts)He's not Steve Jobs, there is no reality distortion field here.
Ian David
(69,059 posts)JCPenny Gay Day!!
JCPenny Gay Day!!
Thursday, June 21, 2012
9:00am until 12:00pm in CDT
JCPenny NATION WIDE
I for one am sick of the OMM's (One Million Moms) complaining about JCPenny using Ellen DeGeneres and other homosexual families in their ads. Let's show some support for this company who supports us!! Even if you just buy 1 item for $5 or go on a shopping spree, let's all go and buy SOMETHING at JCPenny's and give back the love they are giving to our community! Let's make a difference!! P.S I set the date during Huntsville's PRIDE week. Invite all your friends and let's see how far we can get support train going!! I personally would like to have 1 million people say they're going and actually go, 1 person (gay or straight) for every One Million Moms. Against gay bullying? Me too! And that's EXACTLY what the OMM's are doing and I do not let people bully me around. You shouldn't either! It doesn't matter if you're gay or straight, come shopping with us!!
More:
http://www.facebook.com/events/233362886765470/239004599534632/?notif_t=plan_mall_activity
J.C. Penney Store Locator:
http://www.jcpenney.com/dotcom/jsp/storelocator/storeLocator.jsp
JDPriestly
(57,936 posts)bigots are picking on it, trying to destroy it for speaking out for gay people.
I really liked the store. My husband was disappointed that there were so few sales personnel. But I didn't have that problem when I went. They may have fired people since I was there.
Virtually all department stores could make it easier for you to find what you want if they placed more maps on the floors of the stores. As I said above, the Penney's near us is too big. But then I am very near-sighted, so that just may be my perception.
liberal N proud
(60,352 posts)Even though, experts point out the obvious, the company insists that the "public" just needs more education.
People like to think the are getting a deal even when they are not.
Proud Public Servant
(2,097 posts)This strikes me as an unsurprising attitude from someone who was a honcho at Apple. (Remember "the phone works fine, you're just holding it wrong"?)
JDPriestly
(57,936 posts)but without all the tricks. I do not like being tricked and fooled with, not when I vote, and not when I shop, and not in my relationships.
onehandle
(51,122 posts)No final prediction here.
Roland99
(53,342 posts)After losing the coupons, JCP "cash", preferred customer discounts, etc. wasn't worth shopping there anymore.
JDPriestly
(57,936 posts)I discovered that I was getting the same price at Penney's without all the coupon hullabaloo as I got at Macy's for the same item with all that cut-out-the-coupon bother (I usually forget to take coupons with me anyway so the store personnel just grab and ad and cut them out. Coupons, especially store coupons, are a scam to get you into the store and buying stuff you don't want in my opinion.)
I think that Penney's is being attacked by the usual crowd that is conservative and does not want change. They don't want gays and lesbians to have equal rights, and they continue to want you to have to buy three when you can only find two in your size and style.
The manic shopping that coupons and special deals encourage is part of the reason that Americans have so much consumer debt, so many people over their heads in debt to credit card companies.
Trader Joe's has this same pricing plan, and we love it. We know how much we will pay for frozen foods or cheeses or milk or vitamins or bread before we even think about shopping. And the quality is steady and dependable at Trader Joe's. So I like the new Penney's better than the old.
I also like the fact that Penney's choice of De Generis as its spokesperson is kind of a signal to all liberals, even those of us who are not gay, that we can spend our money at Penney's without worrying that the profits will go to support bigots.
And no, this is not a paid ad. And yes, my family has shopped at Penney's since I was a child and I am very happy with the changes they are making. Now if they would only have a department for small women who are over 40. You have no idea how hard it is to find appropriate clothes that don't scream out that you feel old or make you look like you are trying to look 14 again.
Roland99
(53,342 posts)and using preferred customer programs and JCP "cash" and such.
The deals we got were amazing.
But, alas, that's all gone now.
JDPriestly
(57,936 posts)was asked to pay at Macy's.
The "special" at Macy's was not a real discount. I paid the same for two of the items I bought (a certain piece of underwear) at Penney's as I would have paid for two at Macy's. But if I had bought two at Macy's, I would have paid a lot more because, at Macy's I would only have gotten the same price that I paid at Penney's if I had bought three of the item. And under the circumstances, to buy three at Macy's I would have had to buy one in the wrong size and color because they did not have three that I wanted in my size.
In other words. Macy's required me to buy 3 of the item in order to get the same per-item price as Penney's charged for one. Buying two at Penney's I saved the price of the third item that Macy's required me to buy in order to get that per item price. I spent a third less than I would have spent at Macy's and I became a Penney's fan because I know I will also save money in the future on similar "deals."
Sometimes coupons really are a good deal, but quite often stores hike the prices up so that they can then have a "special" sale and sell them at the price at which they are sold regularly in in stores that don't have "special" sales all the time. Or they buy special, cheap, low-quality products to put on the "sale."
That is why I like Penney's. After that experience with the pricing and having read the reports on their plans to price more like Trader Joe's, I feel I can trust Penney's pricing. Penney's isn't playing a game in which the customer is supposed to guess what price he or she is really being charged and whether or not he or she is really getting a good deal.
My grocery store does not give out coupons. They just charge less for items in the first place than the stores that issue coupons. I prefer the simplicity. And I trust a store more if it isn't trying to pull sales gimmicks on me. To each his own, but I think coupons hoodwink the customers.
Stores have to make a reasonable profit. Once I decide I like a store -- like my local grocer, my green grocer and Trader Joe's, I am a very, very loyal customer.
I want my stores to stay in business, so I want them to make a reasonable profit. I am not interested in cheating my store or besting my store. I want good, reliable quality for a good, reliable price. That is why I shop at my local grocery store and at Trader Joe's rather than at some of the better known chain stores.
I am older. I used to go for coupons and sales too until I began to think about it and realized I was being taken.
There is a certain euphoria that goes with thinking you have gotten a really great price. And that euphoria is like a drug that influences you to spend more money. That's what I feel. It's kind of like gambling, I think.
I like to be very rational about spending my money. It was hard to earn. I made many sacrifices -- not doing other things I would have liked to have done -- in order to earn it and to receive Social Security, so I do not want to waste my money.
Wasting money is like wasting your life.
Roland99
(53,342 posts)or spent 20%, 30% or more less than you did on the two items.
JDPriestly
(57,936 posts)I got at Penney's with the "sale" in the other store, I would have had to pay 1/3 again as much as I paid and been forced to buy the third item.
I see a lot of that in store, and I don't like it. I do not want to be forced to buy a giant sized container of, let's say, sauerkraut, a size that my husband I would take months to finish off, just so that I can get a good price on sauerkraut.
The big quantity, sales mentality was good when I had a family, but now, with an increasingly older population and a lot of young people unable to have large families for financial and other reasons, that old sales technique will, I believe become less popular.
I would like to be able to buy an ounce of oatmeal for the same price per unit in a small package as I can buy it in a large package. In fact, I would like to be able to measure out how much I want of an item and leave the rest for the next customer.
We waste so much of everything. We won't be able to do that much longer. The whole coupon/sales gimmick causes a lot of waste.
high density
(13,397 posts)JC Penney needs to do a better job getting their new lower prices out there. You don't need coupons anymore to get a good deal. Last week I bought some Arizona jeans for $15... Is that an "amazing" deal? I thought it was pretty fair for jeans made in Mexico. No coupons needed.
I deplored the old way of marking the standard prices at about 150% above where they should have been and then the weekly sale that brought them down to normal. It was essentially Penney's way of saying to me, we'll tell you when to shop, otherwise all your wallet are belong to us.
mikeytherat
(6,829 posts)If it goes under, follow the money and see who's picking the carcass clean.
mikey_the_rat
AnotherMcIntosh
(11,064 posts)JI7
(89,283 posts)so i'm wondering if it's not just the pricing strategy .
Lydia Leftcoast
(48,217 posts)and more attempts to appeal to teenagers. Some of the staples I used to buy are now catalog only.
underpants
(182,992 posts)granted it was part of a PR scheme by JCP but once again the market folks clearly have no idea what they are doing.
lynne
(3,118 posts)- so was very familiar with store and coupons and I didn't need a flyer to tell me when the sales were coming as I have it down to a fine science. Then they made the change and, the next time I went in, I was very confused. The store looked the same but the prices seemed to be pre-coupon, pre-sale to me. No improvement in price - No deals. So, I left.
Took me a while to come back but I did. This time there was a big sign out front announcing the white/red/blue pricing system. Good grief, I really snagged a few good deals that day and was very pleased! NOW, I again know how to shop in JCP's.
I hope they hang on. I think that maybe the loyal customers - like myself - were a bit confused with the change. A little more training of the customer might be in order - like continuing the mailers for about 6 months, explaining the pricing system.
Cass
(2,600 posts)They were for specific days and it never failed that I forgot to go on the right date or couldn't go during the time that the coupons were honored.
The million moms need to get themselves a new hobby. Being outraged over a person on a TV commercial is more than a little unstable and whacked out.
I wonder if those million moms are behind GCB getting cancelled... I liked that silly little show, it poked fun at hypocritical "christians" and was a hoot. I'm still ticked about it being yanked while some truly craptastic stuff was renewed for next year, made no sense at all to me but now I'm wondering if those million moms are behind it.
JNelson6563
(28,151 posts)I don't care who does the commercials, Penney's sucks. At least ours here does. The racks are packed, I mean packed, with sweat-shop crap. This stuff is horrible! Crooked seams, fabric you can see through, I mean CRAP. Not to mention selection! Ugh. Many racks, packed to practically unshoppable capacity....small selection just hundreds of the same damn crap. Size variety sucks, at least at the one here. Yep, if you happen to be smaller than a 12 you're SOL.
And Kohls and all the rest are the same. Different fixtures, same crap. Some stores just do a better job of romancing the product~~as it were~~but it seems to me they are all selling the same poorly made crap. Even the "better" stores with "finer" things seem to be getting shittier. $100 for a pair of dress pants that aren't even lined? lolz
I won't feed the gaping maw of these nightmare companies. Fuck that. You would be amazed at what is out there in the used market. Often times people buy stuff and never use it. I have been amazed at the brand new (tags still attached) really well made items I have been able to buy used that I'd never be able to afford in a store. And they will last forever.
Julie
Mz Pip
(27,456 posts)The after Christmas sale is terrific. Huge mark-downs and no need for coupons.
I might go if I have a particular item in mind, but Penney's is a drive down the freeway so I have to be pretty motivated.