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Monday, March 11, 2013

Will J.C. Penney Survive? $jcp #hbs #harvard #harvardreview

Will J.C. Penney Survive? $jcp #hbs #harvard #harvardreview

This week J.C. Penney released its fourth quarter earnings results and they were dismal. Comparable store sales nosedived by 31.7% in the fourth quarter of 2012 versus the prior year. Internet revenue sank by 34.4%, and gross margin dropped from 30.2% to 23.8%.
What's causing this financial Armageddon? The sole culprit is J.C. Penney's new "Fair and Square Every Day" low pricing strategy. In January 2012, Ron Johnson, Penney's CEO, announced that instead of offering weekly sales, the retailer was reducing prices across the board. Johnson's pitch to consumers was in essence, "Why wait for a sale? We have low prices all of the time." To be clear, Johnson was not claiming that Penney's everyday prices are the lowest, simply "fair."

1 comment:

  1. J.C. Penney sells ugly clothes with horrible lines. They need an aesthetic touch. Even Sears has more to offer than they do as far as clothes that fit nicely.