A community of 30,000 US Transcriptionist serving Medical Transcription Industry

"Who Killed JC Penney?" Or, before Nuance slashed my earnings


Posted: Mar 1, 2013

(Or maybe not. Truth is, I haven't  shopped there much since my kids' wardrobes became their own business. But I am still fond of "Penney's.")


Who Killed JC Penney?

 

 

  Share4FEB 28 2013, 4:54 PM ET 82 

CEO Ron Johnson might be the captain of a sinking ship. But he was handed the Titanic when the dining room was already under water.

615 jcp short.jpg
Reuters

"The Worst Quarter In Retail History."

That's how Henry Blodget described JC Penney's last three months of 2012, as same-store sales took an epic 32 percent nosedive. To be clear about exactly what a disaster that is, it means that for every $100 dollars JC Penney sold in a store around Christmas 2011, it sold only $68 in that store in Christmas 2012. That doesn't look like the beginning of the end for JC Penney. That just looks like the end.

To appreciate how we arrived at this moment, let's rewind the tape about six years. It's early 2007, Steve Jobs is about to introduce the world to "iPhone", and JC Penney's stock is on fire, having tripled since the turn of the century. With 99 percent of purchases being discounts, coupons are looking like an unbeatable business strategy. 

Then the recession hits. The stock promptly falls by 75 percent. While competitors like Macy's and Target limp back to recovery, JC Penney clings to its decade low.

Bill Ackman, the activist hedge fund manager who owns a sixth of the company, decides he wants to shake things up. He hires Ron Johnson from Apple. Johnson is a legend, having designed the world's most famous sleek white showrooms and having made Target a discount fashion destination. Johnson is an Ideas Guy, and, naturally, he arrives at JC Penney with an Idea: No more coupon games, just low prices.

Why would JC Penney ever entertain the idea of blowing up their core coupon business? Brett Gordon, a professor at Columbia Business School, explained to me that for a company like JC Penney, there are two kinds of shoppers: the bargain-hunter and the clock-watcher. They need less of the first and more of the second to survive. 

Bargain hunters don't just like bargains. They also like the hunt. They're cheap, they're poor, and they're not getting richer in the near future. This is JC Penney's demographic, and it's not a growth demographic. Winning the war for their slim pocketbook means competing against stores like Walmart that will beat you on price every time. It's a losing game.

Johnson wants to journey upmarket. The clock-watcher likes a good bargain, but she really just wants to buy her kids' clothes and get on with life. Her time is more valuable, because she is more valuable. She's not so cheap and not so poor. This is the shopper Johnson decides he wants to attract by ditching coupons and moving to permanent low prices with occasional sales.

I've tried to present this argument as fairly as possible, but whatever you think of Johnson's fundamental insight, it is not working. Sales are in a free fall, because the bargain-hunters are hunting elsewhere and nobody is taking their place. Ron Johnson might be a genius, but he's a genius at building shopping experiences for young, hip, upwardly mobile professionals. JC Penney's target audience is older, less hip, lower middle class moms and kids.

It's very likely the JC Penney could not have been saved by anything short of a presidential executive order that all mom jeans shall henceforth be purchased from JC Penney. As I've written, department stores are in secular decline for economic reasons (the non-recovery recovery), demographic reasons (younger people are moving away from older suburbs), and technological reasons (Amazon.com is a department store in every room and Walmart wins every price war).

Ron Johnson might be the captain of a sinking ship. But he was handed the Titanic when the dining room was already under water. 

;

A definite difference lately - sm

[ In Reply To ..]
Couldn't put my finger on it, but that explains it. Not my style of clothes anymore. A more sterile atmosphere.

Penny's - Effie

[ In Reply To ..]
I use to buy lots of my grandkids clothes there.. but lately we leave empty handed.

JCP - hate it now

[ In Reply To ..]
I stopped shopping at JCP when they stopped sending out the coupons in the mail. I cut up my credit card right then and there. Another thing they did was get rid of their St. John's Bay brand...I wore SJB jeans all through high school in the 80s and until they seemed to have disappeared. If you search the brand on the JCP website, they have a whole bunch of items, until you actually click on something and discover that none of the colors or sizes are available. Why not just take them all off the site? I also saw by reading reviews that their quality seems to have gone downhill. Thank goodness for Kohl's!

Similar Messages:


Lawsuit: Goldman Sachs Bonuses Bigger Than Its EarningsJan 08, 2010
By Daniel TencerThursday, January 7th, 2010 -- 9:30 pm A lawsuit filed against investment bank Goldman Sachs by a shareholder alleges that the company spent more money on corporate bonuses than it earned in 2008. Shareholder Ken Brown's lawsuit is one of two suits filed against the company this week over its controversial decision to hand out billions of dollars in bonuses even after it was accused of playing a central role in the financial collapse of 2008 and receiving $10 billion in di ...

Socioeconomic Malaise: Such As, Earnings Of Men With Only High School Diplomas Dec 09, 2012
The No Good, Very Bad Outlook for the Working-Class American Man The U.S. economy is still a powerful engine, but workers aren’t seeing the benefits, less-educated men are struggling, and the rich have disconnected from everyone else. By Jonathan Rauch, The National Journal. [This article discusses some big, important trends the evening news isn't, regardless what channel the TV's turned to.] If the American economy were an automobile, you would say the transmission is failing ...

Nuance's Treatment Of Their MTsAug 08, 2017
omg ...

Nuance Buys TranscendMar 07, 2012
6-9 months to conclude. ...

Prayer Request, NuanceAug 16, 2016
God, Please make Nuance Transcription crash and burn and suffer horrible pain and financial difficulty as they have done to so, so many transcriptionists over the years.   Thank you ...

Dog Killed 2 Days AgoAug 18, 2016
On Tues, my husband took our 2 dogs out for usual late morning walk while I was at work. A pit that was loose (or pit mix) snuck up on them from behind and ambushed them basically. Hubby wrestled with the pit & got him in a choke hold, made him let go of our dog (chihuahua mix). This other man happened to show up and grabbed the pit, held him while hubby untangled our dogs leashes & picked up our chi, headed back to our apt. Other man then let the pit go. Hubby called me so I t ...

Marines Killed In TNJul 16, 2015
I just learned of the horrific act of terrorism in TN commited once again by a Muslim extremist who hates America. Is Obozo calling today's terrorism another incident of workplace violence? ...

People Are Being KilledJun 15, 2017
https://thegedsection.com/blogs/lynchings-severed-head-and-decapitated-body-found-in-mississippi?utm_campaign=115522&utm_medium=cmsshare&utm_source=facebook&utm_term=dl_hughley   This is sad and sick...and ignored??  Why??  ...

The Ohio Man That Killed The ChildApr 02, 2013
I can't stand our justice system, I swear it makes me crazy!  The news article, an Ohio man kills a 3-year-old child by having sex with her and suffocating her, which he ADMITS, but he actually gets a trial, because he is fighting the death penalty, because he didn't mean to kill her, he only meant to rape her!  I mean, WHAT!  He apparently was drunk and mad at his girlfriend (The child's mother) because she wouldn't have sex with him, so he decided to have sex ...

My Dog Killed My Kitten Last NightSep 11, 2013
the kitten was really a stray that came from my mom's and was living in my garage, but I had been feeding it and it was starting to be a little bit friendly, and it was really cute.  Every time my dog saw it he would chase after it and bark but I never thought he'd really hurt the kitten.  Last night he grabbed it and shook it and broke it's neck.  I picked the poor thing up and held it while it died and told it I was so sorry.  I'm so mad at my dog and I ...

Three Indian Men Shot, One KilledFeb 24, 2017
If you think that words don't matter, especially when they come from the POTUS, think again.  These nuts gain encouragement from those words. ...

Terrorist Has Killed At Least 8 In Historic AMEJun 18, 2015
Described as 20-year-old white male, still on loose.  Bomb threat prevented some investigation.    State Senator Clementa Pinckney reported to be among dead.     ...

At Least 100 Killed In Theatre In ParisNov 13, 2015
Most of these were young people. This is going to happen more and more. This is awful. Geraldo Rivera's 21 year old daughter was at the soccer game. Now they have closed the borders and other measures. ...

2 More Soldiers Killed In Afghanistan ProtestsMar 01, 2012
http://www.usatoday.com/news/world/afghanistan/story/2012-03-01/nato-troops-killed-afghanistan/53312346/1 When are we going to get the heck out of there? ...

Anti-Romney Ad Claiming He KilledAug 07, 2012
This outrageous ad has already been debunked, but good grief! Talk about dirty politics. This man's wife became ill and died 5-6 years after Romney left Bain; he was Gov. of MA by then. Under Obamacare, this man would be hunted down by the IRS and fined for not having health insurance. And BTW, this same man in the ad has been in previous pro-Obama ads. Just sayin'. ...

1.4M Americans Killed By Gun Violence Since 1970.Dec 17, 2012
"Stop Handgun Violence is a Boston, Massachusetts-based 501(c)(3) non-profit organization that works to reduce and prevent injuries and deaths caused by firearms in the United States. The group advocates personal responsibility, public awareness, stronger legislation, increased gun manufacturer responsibility, and strict law enforcement." Link to their site below, with information on how to get involved. "33 states have no background checks for private gun salesNR ...

Hostages Reported Killed In AlgeriaJan 19, 2013
Hostages reportedly killed as Algerian desert standoff ends   View Photo Gallery — Freed hostages from Algeria crisis: Survivors of one of the largest hostage crises in recent memory began recounting their ordeal, which began Wednesday when Islamist militants took over a natural gas facility in Algeria.   Text Size Print E-mail Reprints By Anthony Faiola and Michael Birnbaum,  Updated: Saturday, January 19,  ...

Three Officers Killed In Baton RougeJul 17, 2016
Three officers killed and 7 injured in Baton Rouge.  Just happened within the last hour or so  -- so TRAGIC! ...

At Least 3 Killed In Austria After Man Drives Into CrowdJun 21, 2015
The man has been arrested after injuring more than 30 people. A seven-year-old boy is reportedly among the three people killed in Austria by a man who ploughed his car into crowds in the country’s second-largest city and then reportedly started stabbing people. A witness told the Wiener Zeitung newspaper that dead bodies were left lying face down in the road after the vehicle sped through streets near the the historical Herrengasse in Graz. The killing only stopped when the driver pa ...

Richard Matt Shot & KilledJun 26, 2015
Breaking news...first said wounded, now saying killed ...

25 Years Since The Ozone Hole Has Killed Us.Jul 19, 2017
DDT, Global Cooling, China Syndrome, Ozone Hole, Global Warming, Climate Change – the left moves seamlessly from one world ending snake oil scam to another. In 1992 they blamed the ozone hole on President Bush, and said it was going to kill us all. ...

A Dear Friend Of Mine Was Killed In A WorkDec 28, 2009
accident Saturday morning.  Please keep his family and friends in your prayers.  ...

Iran Nuclear Scientist Killed In Bombing....Nov 29, 2010
This is concerning....coupled with what is going on in North and South Korea....all we need is for Iran to attack Israel...and with all that Wikileaks stuff....it is a MESS out there. ...

They're Reporting Ambassador Stevens Was The One Killed In LibyaSep 12, 2012
It's not confirmed but this is what they're saying. The US is only "nervous" about this? Isn't this a reason for war? After all, embassies around the world are the property of the country that "lives" there. They have attacked the USA. It's a slap in the face that Egypt and Libya did this, especially Libya after the help they were given in their uprising.   ...

Abandoned - SEAL Who Killed Bin Laden Jobless,Feb 11, 2013
Only described as "the shooter" by Esquire, he also charges that the SEAL who recently wrote a book about the raid, celebrated in the new movie Zero Dark Thirty, glossed over the shooter's role in promoting his own shot at the corpse of bin Laden. The long article in the upcoming magazine said that the shooter came forward to talk about the raid to bring attention to the lack of support offered by the Pentagon or administration for troops once they come home. Esquire said its story " ...

Woman Killed In Attack In London Was American.Aug 04, 2016
people injured in a stabbing attack in London’s Russell Square by a Norwegian man of Somali origin who was arrested after the incident, authorities said.... So far we have found no evidence of radicalization or anything that would suggest the man in our custody was motivated by terrorism," Rowley said. He said the woman who died was a 60-year-old American, and the five injured people are British, American, Israeli and Australian. None had life-threatening injuries. Two remain in a hospi ...

Mexican Police Chief Killed With F&F RifleJul 09, 2013
The police chief was killed in January of this year but the story just came out yesterday. It would be wise to keep the pressure up on this gun-running scandal since more people are being killed in Mexico every day and there have been some incidences of murder in the border states, especially AZ and TX. This also is the reason why Immigration Reform should NOT be done until border security is done FIRST. The below story was found on one site called Power Line but the more involved story is ...

ISIS Killed 24 More Near The Marine Base In Iraq.Feb 17, 2015
I think our 400 Marines nearby should get out of dodge NOW! The JV team is certainly turning out not to be JV. Let's save our people and then bomb ISIS to bits. Don't ask me how. Just ask your president to listen to the generals, which he has not done for 6-1/2 years. ...

Football Player Killed By Police In HoustonAug 10, 2015
Oh look, it's happened again. ...

What Are Your Ideas To Prevent People Being Killed By Guns?Oct 06, 2015
I would love to see something like the DMV for gun owners.  You would: 1.  Register all guns just like cars. 2.  You would have to pass a test for a license to use it.  Including that you are not a drunk, not blind, have some debilitating condition, a criminal, have a restraining order. 3.  You would have to show proof of liability insurance.   Psychologists/doctors would be able suspend licenses but there would be an appeal process. Now, I am not afraid of tha ...