The J.C.P. Company is a major mass chain retailer of lower
moderate sportswear for men, women, and kids. They have attempted
to reposition themselves as a value priced retail store and
eliminated sales coupons to promote “everyday value pricing” as
their new key strategy for growth. In addition, they launched a
Sephora cosmetics division as part of the firm’s national expansion
plans. The company previously demonstrated high sales growth and
profit margins until recently. They have a decent following among
babyboomers who are middle aged shoppers that prefer basics and
good value clothing for the suburbs where most of these stores are
located. However, JCP is losing market share to other retail brands
such as Macy’s and Kohl’s and Target stores. Now the company has
tried to reposition their target market to attract the “middle
America” shopper and also reach out to Millennials who are young
and savvy.
The firm was trendy in the 1980’s through their association with
great suppliers and easy sportswear that worked for housewives,
working parents, and classic lifestyle preferences. They supported
marketing events on television shows such as “Desperate
Housewives.” The corporation has just raised the capital needed to
streamline its production and distribution facilities in order to
improve their supply chain management. Moreover, the senior
executives in the firm are also evaluating various marketing and
retail opportunities that could potentially increase sales, market
share, and profits while broadening the customer base.
The retail environment is highly promotional and customer
traffic is slow due to rising gas prices, energy costs, and
concerns about inflation and a recession. The stock price of the
company has plummeted on the NYSE. The firm has also had excessive
markdowns because of slow sales and excess inventory. The brand has
saturated the marketplace and some retailers have lost confidence
in the design team and direction of the company’s new CEO Ron
Johnson who came from the Apple Stores. Although he was fired in
April 2013 for poor sales, profits, and lost shareholder value, the
lasting effects of his poor reign linger. Industry insiders believe
that the brand has already matured with no future growth
opportunities anyway. Some suggest that licensing the brand or
exploring a revamped website might be good alternatives. However,
both of these choices have inherent risks as well.
How does J. C. Penney regain the confidence of Wall Street
analysts and their retail department store partners and return to
brand prominence and profitability?
How do they reposition their brand for a new customer while
maintaining the brand loyalty of their old one? If you were the
newly appointed CEO of the firm what would you do?
Reminder: NO ATTACHMENTS ACCEPTED.
Include a bibliographyof sources used in the
exam.
3-4 pages with APA format please