J.C. Penney New Shops Shine, Rest of Store Sales Tough

J. C. Penney new shops shine, rest of store sales toughSept 19 - J.C. Penney Co's (JCP) new shops within stores are doing much better than other parts of its department stores, but it is "way too early to draw conclusions" as the retailer is still rolling out the strategy, Chief Executive Ron Johnson said.

Comparable sales at the new shops within stores, including those selling IZOD sportswear and Levi's jeans, are running 20 percent higher than elsewhere in the stores, Johnson told analysts on Wednesday.

Investor enthusiasm for results at the new shops quickly faded when Johnson spoke about sales in the rest of the store.

"We had a back-to-school (season) that ... continued like it started; we were pretty pleased with it. The last two weeks have been much tougher than we planned," he said during a presentation in Texas that was also webcast.

Johnson conceded it was "way too early to draw conclusions" as the retailer has so far opened only 12 of the "stores-within-stores" 3 to 7 weeks ago.

Sales of denim overall during the back-to-school season were great, Johnson said.

Shares of J.C. Penney closed up 3 cents at $29.09 after rising more than 8 percent initially following Johnson's comments about sales at the stores-within-stores.

Under Johnson, J.C. Penney is planning to transform its stores into a collection of 100 specialty boutiques by 2015.

The strategy also included getting rid of coupons, leading to large sales drops early on as confused shoppers accustomed to discounts went elsewhere. In the second quarter, same-store sales fell 21.7 percent.

Activist investor William Ackman, whose Pershing Square Capital Management is Penney's largest shareholder, asked during the meeting about the company's store at the Stonebriar Centre shopping mall in Frisco, Texas, where updates have been made.

That store's look surpasses those of the chain's other stores and Penney is working on rolling such improvements out elsewhere, Johnson said.

"Presentation changes perception," Johnson said.

Penney is trying to lure slightly younger shoppers with a little more income than its current clientele. In the home category, it hopes that bringing in products from the likes of designer Jonathan Adler and architect Michael Graves will attract new shoppers to the 110-year-old chain.

Penney has the oldest customer in home goods compared with rivals Target Corp (TGT), Wal-Mart Stores Inc (WMT), Macy's Inc (M) and Kohl's Corp (KSS), Johnson said.

"We've got to get a younger customer," Johnson said.

(Reporting by Brad Dorfman in Chicago, additional reporting by Jessica Wohl; Editing by Gary Hill, Gunna Dickson and Richard Chang)


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caryan60

Shopped at jcp yesterday for first time in awhile. The store looked great, and the merchandise was perfect for my needs Found everything I was looking for instead of finding nothing. LOVE the new JCPenneys.

October 04 2012 at 7:54 PM Report abuse rate up rate down Reply
ejwstars

I retired after 15 yrs of part time work. Not happy with the store they have taken away the customer service and the feel of the store is very cold. Went to Kohls for the first time and it felt like the old penneys very crowded and people in line with there coupons and great customer service people asking if I could be helped . too sad for penneys

September 30 2012 at 11:47 AM Report abuse rate up rate down Reply
ejwstars

I retired after 15 yrs of part time work. Not happy with the store they have taken away the customer service and the feel of the store is very cold. Went to Kohls for the first time and it felt like the old penneys very crowded and people in line with there coupons and great customer service people asking if I could be helped . too sad for penneys

September 30 2012 at 11:47 AM Report abuse rate up rate down Reply
jwells1008

Strategy doomed for failure. Shops must have superior sales people and JCP won't pay up to have them

September 20 2012 at 8:48 AM Report abuse +1 rate up rate down Reply
lifehub

Ugly, costly stuff.....as usual.

September 20 2012 at 6:24 AM Report abuse rate up rate down Reply
Mom and Dad

Here we go again, Ron Johnson trying to put lipstick on a pig.

September 20 2012 at 12:39 AM Report abuse +1 rate up rate down Reply