Beleaguered retailer and mall anchor JCPenney’s CEO Myron Ullman may have stopped his company’s bleeding, but will it be mark the end of JCPenney as a brick and mortar brand?
In a recent summary at Motley Fool of JCP’s recent shareholder conference call, hints in the tea leaves about JCP’s future abound — and they don’t necessarily look great for the physical store side of the business. Andrew Marder writes:
J.C. Penney in the long run
Talking about J.C. Penney’s long-term plans, Ullman said during an earnings conference call that the retailer is “focused on refining [its] merchandizing and marketing strategies, in order to steadily grow sales and significantly improve gross margins.” This is where the rubber hits the road and investors find out if Ullman can make J.C. Penney into a new, better business.
The company’s biggest long-term problem is that J.C Penney is a mall-based company. As sales move increasingly online and mall traffic dries up, J.C. Penney needs to shift in order to keep itself afloat. The company’s current move is to push for more online sales. Ullman sees that: In the last quarter, online sales rose 25.7% compared to the same period in the previous year.
Ullman has worked to bring J.C. Penney’s online and physical stores more in line with each other. In November he said, “The success of JCP.com reflects the reintegration of store and online buying, planning, and allocation.” When he first came back to the company, Ullman said that there was “little synergy between stores and online” — a situation he’s worked to improve.
That seems like a sign that Ullman’s head and strategy are in the right place. This company still has a long way to go, but it’s clearly making the right moves. There are very few people who thought J.C. Penney could bounce back from the Johnson reign, and I wasn’t one of them. However, Ullman has convinced me that he knows what his customers need and that he can give it to them while still making money. I’m excited to see how his plan plays out.
Retail space professionals are reminded: losing an anchor can easily be a prelude to losing a whole ship.