Overview JCPenney is an American retail store that was founded in 1902 by James Cash Penney. From 1913 to 1924, the company was called J.C.Penney and it was incorporated in 1913 and the company move its headquarter to New York in 1913. In 1927, JCPenney became a publicly traded company. There are more than 1,100 stores located both in United States and Puerto Rico and most of stores located inside the suburban shopping malls. Since 1998, it is one of the largest shopping retailer in the US which offered a wide range of products including family apparel, clothes, jewelry, shoes, accessories and home furnishing products. In the store, customers can find a well-brand such as Sephora, Mango, and also a variety famous labels like Arizona, Washington, and etc. Also, JCP invested a significant amount …show more content…
However, with the decision of closing the catalog business and the hiring of the new CEO Ron Johnson in 2011, the company has started experiencing multiples challenges in brand image and marketing strategy. Problems One of the first moves that the new CEO Ron Johnson did was to eliminate the use of promotions and coupon which created the biggest problems for the company. By looking at the chart in Appendix 1, we can see that JCpenney Operating Income Annual has started declining since the move was made in 2011 with the annual profit from $16 billion per year to the point where company start experienced loss in financial crisis. At the same time, JCPenny also laid off more than 1,600 workers during the 1 year span period. From 2009 to 2013, the company’s asset is also going down from $18 billion to $16.3 billion and it seemed that the company has lost its identity. JCP’s main customer was used to
According to Joe Skorupa, in his article JC Penney 's Turnaround Is Years Away, “Johnson’s time frame for the mini-mall concept to reach maturity in every JC Penney store was 2015. The mini-mall concept was to turn JC Penney into a small-scale mall. Ron Johnson wanted to separate each brand into small shops with in JC Penney. There was also a coffee shop with iPads and games for the family incorporated in areas of the store. Imagine a much smaller mall inside JC Penney stores. He was clear in his report to analysts that it will take the time to see results because the goal is not to improve JC Penney but to transform it. “Due to these changes JC Penney 's nearest debt maturity was on October 2015 when its $200 million 6.875% medium-term notes mature.” (Halkias, 2014). A great wat to explain will be with the product life cycle (PLC) “the course of a products sales and profits over its lifetime. The PLC has five distinct stages, number one is product development this is when the company finds and develops a new product idea.”(Armstrong & Kotler, 2013, p. 242). At this stage the product sales are zero and the company’s investment costs mount. Second is introduction, the period of slow sales growth as the product is introduced in the market. Profits are still nonexistent in this stage. Number three is the
After he was hired, then CEO Ron Johnson introduced a pricing philosophy called “the true price,” which involved the replacement of sales through coupons with everyday low prices. This eliminated the need to inflate prices that would later be discounted for sales. However, Johnson overestimated the rationality of consumers and forgot that coupons were communication tools that announced the beginning of the shopping season5. Their core customers were dependent on coupons and often times waited until sales before they would shop. The coupons gave customers psychological justification to shop for good deals. Besides alienating core customers by removing coupons and sales, he tried to turn JC Penny into a more modern shopping experience complete with boutique stores within the larger store, Wi-Fi, and juice bars with smoothies and coffee3. National brands replaced p...
DuPont has been known for its low reliance on borrowings. In the 1970’s, the company had to assume a substantial portion of debt of Conoco, a newly acquired company. In 1983, the managers have to decide about the future optimal target debt ratio. Should the company continue to keep about 40% of its assets financed via debt or should it strive to lower its borrowings to 25%?
Kmart filed for reorganization under the U.S Bankruptcy code and announced they are going to develop a intend to manage the financial needs of their stakeholders. There plans were to cut back in size and restructure the organization. However, even with annuall...
J.C. Penney is in only its second year of Internet sales, and its going strong and growing. Sales jumped from $15 million to $102 million since the beginning of jcpenney.com.
currently found new ways to better the company such as “Walmart to go” online shopping.
...ized store, and has been consistently committed to bring quality, value, and convenience to their customers. Kohl’s has remained successful due to their competitive strategy and catering to their core target market. As long as they continue to follow their competitive strategy and revise operations and processes as the world and shopping trends and patterns continue to evolve, they will continue to strive in the retail market. Redesign and creativity are an important aspect in a retail environment, and Kohl’s has a big opportunity to appeal to their shoppers senses to lead them to the areas and products they are featuring. Their overall processes, goals, and operations have made them who they are today. Kohl’s has and will continue to be a popular retail establishment in many neighborhoods, and will continue to grow by leaps and bounds in the coming years.
In 2011, MSLO expected to raise extra capital. It swung to investment financier Blackstone to locate a strategic accomplice. Blackstone, through its connections with members of the governing body of JCP, organized Ms. Stewart and JCP executives to meet. In spite of the fact that JCP executives truly knew about Macy's concurrence with MSLO and that MSLO was searching for a strategic (money related) accomplice, they continued to initiate negotiations for a retail partnership instead of the strategic partnership at first sought by MSLO. The confirmation in the record plainly shows that JCP executives realized that, keeping in mind the end goal to acquire this retail partnership, they would need to "break" the exclusivity provisions in the Macy's
Overhauling all the stores posed a huge cost and consumers missed the deep discounts that J. C. Penney’s was famous for also Penney had been hurt by their competitors like Macy’s Inc. and Kohl’s Corp. The former chief executive Myron Ullman phased out the catalog business and partnered up with the MANGO fashion line and Sephora cosmetics but this did not do too much for sales and lead to heavy discounts to clear out merchandise. According to our reading Mr. Johnson decided to lower initial prices on items by about 40% from where they started so consumers would be more comfortable and sales would improve. The next thing Mr. Johnson decided to do was reduce the number of promotions, pick a few in-season items and have them on sale for an entire month, have only two clearance sales a month and round off pricing to only dollars no cents. This is hopefully going to improve sales and Penney plans to spend eighty million dollars a month on this program because consumers will bargain hunt for the best
Blue Bell is an established ice cream company that is well known throughout the southern part of the U.S. Their most popular flavor, homemade vanilla, strengthens the core of the brand. Over the years they’ve added new items to their menu like low fat ice cream, sherbet, no sugar added vanilla and the exciting holiday flavors revealed towards the end of the year. The ice cream is produced in what they’ve established as “creameries” which are open to the public.
In 2000, Coach Inc. became the first recognizable retailer in providing an accessible luxury good, namely in the women’s handbag market. Coach’s mission was to do something competitors had not yet realized was feasible: they offered a product of comparable or matched quality at a significantly lower price. Coach’s sales increased at an annual rate of 20% until the onset of a slowing economy in 2007 known as “The Great Recession” (Gamble, 2015, Page 73). Slowing sales began to take their toll; however, it was the introduction of primary competitors following a similar business strategy (Ex. Michael Kors, Versace, etc.) to the market that directly threatened Coach’s standing. In an attempt to revive business, Reed Krakoff was hired as the new
A key point to note that American Apparel is a clothing store, and some of the ads show an extremely low amount of clothing; for example, one particular ad, featured in an article by Time magazine on controversial American Apparel ads, shows a young girl sat with her knees to her chest, wearing nothing other than socks up to her knees. The text on this advertisement refer to her socks, however she is sat with her arms around her socks, which are also partially covered with three thumbnail pictures of just her face. (Stampler, 2014) Without the text, it could be difficult to conclude that this is an advertisement for socks. Returning to the former way of advertising would mean an increase in customer satisfaction, since the controversial ads would no longer be produced. In return, the corporate image would also gain approval, only being tainted by Charney’s negative publicity of sexual harassment lawsuits. The risk behind this alternative would likely be very low, since ads would become less hyper-sexualized and more family-friendly. We believe American Apparel can still keep their mission to portray natural beauty without being distasteful and controversial in their advertisements. Finally, the cost will possibly
The top executives have closely watched the financial stability of J. Crew over the last few years due to a few recent drops in revenues. For example, according to a PR Newswire article, J. Crew’s fiscal 2015 saw overall revenue drop of 3% down to $2,505.8 million. In addition the company also saw a 7% decrease in sales down to $2,146.7 million. While certainly not an indication of total company break down, the company does acknowledge there is room for improvement. CEO Mickey Drexler stated, “Looking ahead, our team is focused on delivering further improvements in the business by executing on our strategic initiatives to deliver long term, sustained growth for our brands”, an optimistic look forward for the company and any shortfalls.
Macy’s won the case. JcPenneys disagreed and appealed the case. The case went to the New York appeals court. The New York Supreme Court Appellate Division, First Judicial Department, restored claims alleging that JcPenneys persuaded Stewart to reveal confidential information about its contract with Macy’s and engaged in unfair competition. The appeals court said that JcPenney’s desire to have Martha Stewart’s company breach its contract with Macy’s was intentional, but declined to award punitive damages. The appeal decision was made by Judge Jeffrey K Oing, who after a six-week bench trial in 2013, rule that J.C. Penney had interfered with the contract between Stewart and Macy’s, paying the way for Macy’s to claim lost profit-related damages in the high-profile case. Macys was represented by Theodore Grossman of Jones Day, and he said that J.C. Penney is now in a worse position for having appealed. During the course of the trial, the top executive from all three companies took a stands including Macy’s CEO Terry Lundgren, and former J.C. Penney CEO Ron Johnson. J.C. Pennney argued on appeal that the contract between Stewart’s company and Macy’s was vague and did not prevent a side deal allowing J.C. Penney to set up mini Martha Stewart stores within J.C.
Overconfidence in people like the CEO, plays a big role in JCP’s failure to succeed. Johnson set very ambitious goals due to his experience and previous successes with companies like Apple and Target. Unfortunately, Johnson was not flexible with his decisions. His thought process was that if it worked once with Apple and Target, it can work again with JCP. He did not process, identify red flags through his strategy and implementation, and lost the best opportunity to adjust before matters got