WTF Is Going On With J.C. Penney?
Last week, J.C. Penney announced it will cut 2,000 jobs and close 33 underperforming stores as it tries to reverse poor profit performance. You might also be aware that the struggling department store has had quite the baffling year—from CEO changes and questionable tactics to bizarre commercials and plunging sales. Here, a little timeline of what the retailer has been up to:
-In an effort to pinch pennies, they made the
worst decision in retail history risky choice to eliminate all sales and coupons. That was the grand idea of CEO Ron Johnson, a former Apple retail chief, who thought he could entice customers with consistent low prices in lieu of discounts. Yeah, that didn’t go over so well. Shoppers left in droves, which led to …
-The airing of a creepily personal 30-second spot, which attempted to appeal to consumer emotions—”Come back to J.C. Penney; we miss you” is an actual quote from the ad—but ended up seeming desperate and out of touch. The mea culpa came just a month after Johnson vacated his post. (Everyone saw this one coming; rather than move to Texas, where J.C. Penney is headquartered, Johnson commuted from California. And you think your commute is bad?) Note: The commercial is no longer available on J.C. Penney’s YouTube channel—are we sensing some embarrassment?
-Then in June, Buzzfeed reported that the company brought an “organizational therapist” to a merchandising division meeting that was attended by hundreds of employees. The therapist’s presence was in light of Johnson’s firing and a grim year that saw revenue sink 25 percent (s0, not particularly unwarranted). Apparently the Chief Merchant, Liz Sweney, and the therapist “proceeded to compare the experience [of Johnson’s tenure] to a bomb explosion and the 9/11 terrorist attacks.” According to Buzzfeed’s sources, Boatlift, a 12-minute video narrated by Tom Hanks about the evacuation of half a million people after 9/11, was then screened. Um, what?
-Last week, Business Insider went to a few J.C. Penney stores in suburban New York to see what kind of turmoil the retailer was really in. The photos are pretty startling (think: stained floors, vacant racks, and unattended registers).
So about those store closings. These are the Pennsylvania and New Jersey locations that will shut their doors: Exton Square Mall in Exton; Laurel Mall in Hazleton, PA; Washington Mall in Washington, PA; Burlington Center in Burlington, NJ; and Phillipsburg Mall in Phillipsburg, NJ.
But there’s a sliver of good news: Beginning in February, about 3,000 sales associates in certain departments will go back to a commission pay system. Bloomerg reports that the system will act as incentive for high-performing employees to stay on, as well as increase home furnishings and fine jewelry sales. The LATimes also says that the company plans to revamp its home section. The closings will save the company $65 million a year, and with former CEO Myron Ullman at the helm, maybe a turnaround is in sight. But as it looks right now, the company has one heck of an uphill battle ahead of it.