This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

J.C. Penney's 'Turnaround'

"Everyone's always talking about getting a younger customer, but I also think first they need to do a much better job of serving its core customer group," he adds. "It's a lot easier to re-activate customers."

Still the company certainly has quite an uphill battle to win. Besides reversing what previous management put in place, then J.C. Penney is back to the problem of how to win Middle America customers against competitors like Wal-Mart (WMT), Target (TGT), Macy's (M) and Kohl's (KSS).

"Long-term, they're in a big fight," says retail consultant Jan Rogers Kniffen.

"When I went into the business there were over 100 department stores literally ... That game is over," he says. "Macy's won the game. Kohl's won the game. J.C. Penney could be a part of that, but do we really need another department store?"

J.C. Penney is bringing back once-popular private-label and national brand merchandise as well as exclusive brands and new partnerships, for instance Disney (DIS) shops that will open in the kids' section starting in October, Ullman said. It's also looking to e-commerce for a boost that Ullman said "popped almost immediately" following the company's realignment of merchandise online to match in-store selections.

Of course, J.C. Penney's biggest test will be whether it can show significant improvement results during this year's holiday season.

J.C. Penney plans to be "a primary destination" for Black Friday and Cyber Monday, Ullman said.

Some say it's too big a fight to win.

"We believe JCP has been burned by the effects of a failed turnaround strategy, which has created a hole that is just too deep," Wells Fargo Securities analyst Paul Lejuez writes in a research note on Wednesday. Lejuez rates the company at "underperform."

"For JCP to get back to break-even from an EPS perspective, they would have to recover 75% of its lost sales (from FY2011), achieve gross margin of 37%, and not spend another SG&A dollar vs. FY2012 levels, and there is no telling how long it could take," the note cautions. "While liquidity is not an immediate issue, the company may need additional liquidity in FY2014 if business does not turn sharply."

-- Written by Laurie Kulikowski in New York.

To contact Laurie Kulikowski, send an email to: Laurie.Kulikowski@thestreet.com.

>To submit a news tip, email: tips@thestreet.com.



Follow TheStreet on Twitter and become a fan on Facebook.

Disclosure: TheStreet's editorial policy prohibits staff editors, reporters and analysts from holding positions in any individual stocks.
3 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
Dividend Stock Advisor

David Peltier identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Updates with exact steps to take - BUY, HOLD, SELL
Trifecta Stocks

Every recommendation goes through 3 layers of intense scrutiny—quantitative, fundamental and technical analysis—to maximize profit potential and minimize risk.

Product Features:
  • Model Portfolio
  • Intra Day Trade alerts
  • Access to Quant Ratings
Options Profits

Our options trading pros provide over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • Actionable options commentary and news
  • Real-time trading community
SYM TRADE IT LAST %CHG
JCP $8.83 -0.11%
AAPL $132.54 0.88%
FB $80.54 0.07%
GOOG $540.11 -0.44%
TSLA $247.73 0.86%

Markets

DOW 18,232.02 -53.72 -0.29%
S&P 500 2,126.06 -4.76 -0.22%
NASDAQ 5,089.3620 -1.4320 -0.03%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs