JCPenney was at one time the leading retail chain consisting of department shops in America. It has around more than a thousand retail shops in various malls across USA and Puerto Rico and its operations are based in Plano, Texas. It operates mainly by developing stores to anchor big malls but since the retail boom started in the 60’s, it has followed its competitors by opening standalone shops as well. Right now the departmental chain is fighting to survive competition from upscale competitors (Macy’s) to major discounters like Wal-Mart.
The reason for JCPenney’s downfall was its loss of identity among its consumers. Initially it catered to middle class households mainly. They were the biggest names for home goods and children’s wares but with the onset of such discounted shops like TJ Maxx and Wal-Mart, people did not find the urge to shop in JCPenney’s anymore.
In 2012 , Ron Johnson, the CEO of JCPenneyintroduced to everyone the store within a store concept. These specialty stores were meant for the affluent who wouldn’t mind shelling out extra money for utilities. But this concept did not find many takers among the American people and the sales dropped for JCPenney. The people of America preferred discounters like Wal-Mart and Kohl’s to JCPenny and they gave their verdict which showed in the revenue generated by the company.
The sign is not a good one for JCPenney whose sales dipped by 27% in the last holidaying season of 2013. One of the greatest mistakes that Mr. Johnson made was not to deviate from his strategy and that led to his losing the prime job.
The departmental chain has to breathe life into its sales otherwise they will be so deep in debt that a recovery is impossible. The next strategy could be to duplicate its main competitors’ strategies. Sears for example finds patronage with a certain income group and JCPenney could try to seize them through their cut throat strategy.
Mattioli, D., Talley K. (2012, Nov. 9).J.C. Penney Digs Deeper Sales Hole.
Retrieved from http://online.wsj.com/news/articles/SB10001424127887323894704578108573090031286
Aisner, J. (2013, Aug. 20). What went wrong at JC Penney.Harvard Business School.
Retreived from http://www.hbs.edu/news/articles/Pages/rajiv-lal-on-jcpenney.aspx