The problems over at JC Penney just don’t seem to go away. A failed new sales strategy to eliminate coupons and sales only cost the company a 15% reduction in sales in the last quarter, where the company saw revenues down $163 million dollars, and the company eliminated shareholder dividends after the stock value fell to a 40 year low. Today, investors were apparently leaving JC Penney stock in droves again on news that a former Target executive who had joined JC Penney in the last year, Michael Francis, was leaving the company after he failed to re-brand the company in a positive direction. Francis was the president of JC Penney, but whatever magic he did over at Target sure didn’t translate over to JC Penney. Today the stock tumbled another 8.6% percent, losing another $2.08 a share, down to $22.25 a share.
JC Penney has been running some new ads recently, which look slick enough, however don’t make any mention of prices. The ads solely look like an attempt just to promote the JC Penney nameplate. Previously, some JC Penney ads featured Ellen Degeneres, and were certainly funny enough, however the message of low everyday prices vs. sales, promotions or coupons certainly didn’t bring customers in the door.
The new ads are probably throwing good money in after bad. If JC Penney executives know that coupons or sales drive traffic in the stores, then a return to that strategy needs to be done. To be stubbornly sticking with a failed sales strategy that’s driving down sales, and possibly putting the company on the ropes if continued is an outrageous plan of action. Even political campaigns show the flexibility to change course on a daily to weekly basis if something isn’t working.
JC Penney is one of America’s oldest companies. Whatever worked so well for this company in the past just isn’t being followed today by a new bunch of executives who seem intent in running the company into the ground with unproven business strategies.