It’s no secret that JCPenny department stores have seemingly been on their way out. With sales that have been dwindling every month since December of 2011, many have thought that the government shutdown would be the end of the 110-year-old retailer. However against the odds, JCPenny managed to get a 0.9% gain in the month of October.
The chain was already seeing declining sales numbers when former CEO Ron Johnson took over and attempted to remodel the base of the company from the ground up into a newly revised youthful, trend-setting, hot-spot. One of Johnson’s tactics to accomplish this was to do away with many coupons and sales events.
JCPenny was known for many of these sales events and coupons and Johnson’s direction led to an even greater downward slope for sales to run down. This plan evidently was a total flop and left JCPenny in ruins.
Current CEO Mike Ullman is now on mission to restore the chain into the thriving department store that it once was. He is bringing back the coupons and sales events that Johnson had dismissed as uncool and is now seeing a bit of growth, which all would agree is better than decline.
Ullman has also brought back the clothing line St. John’s Bay, which is a private brand that Johnson had previously cut from all of its stores. The re-introduction of this brand has helped JCPenny turn sales around, as well.
Ullman has also turned things around in the home department by reversing Johnson’s attempt at a home makeover derived from Martha Stuart licensing. Upon introducing the Martha Stuart deal, JCPenny found itself in sizable courtroom battle with Macy’s, which has recently seen some settlement. The largest sales gain that Ullman has seen has actually been in the home department.
There are many analysts who caution against the assumption that the store is now in the clear. To reverse the financial damage that has been done to the company, will require a huge sales increase in this fourth quarter. However, many are hopeful that the turn-around that JCPenny has seen is an indication of permanent direction change and of future growth. As with all things in life, time will tell on this one.
Ron Johnson’s attempt at transforming the chain into a teenage, lush haven, utterly failed and many did not foresee good things for the company. The changes that Ullman has installed are now beginning to prosper. Most of the drastic changes made were the undoing of the former CEO. It’s interesting to see what can happen at the hand of one man’s misdirected ambitions.
