J.C. Penney Cites "Solid Progress" in Turnaround; Home Department Still Weak
PLANO, Texas-J.C. Penney said its turnaround efforts have resulted in "solid progress" in terms of improving sales figures and its efforts to reconnect with its core customers, but that the home department remains an area of weakness in terms of sales trends.
In a statement issued this morning, the retailer said September same-store sales were up 580 basis points over August same-store sales--although, year over year, September comparable-store numbers were down 4 percent. In addition, September sales on jcp.com jumped 25.3 percent in September and 10.8 percent in August over the same months of last year. For the third quarter to date, jcp.com's sales have risen 18.6 percent.
At the same time, the retailer admitted that getting its new home department up and running "has been more challenging than originally planned. The merchandise assortment, shopping environments and price points have not resonated with customers, and sales trends remain weaker in stores."
Under former CEO Ron Johnson, the home department and other areas of the store were reformatted into shop concepts with an everyday-low-price strategy with fewer promotions and coupons, and trendy merchandise. Since Johnson's departure in April, his successor, Myron Ullman, has been reconfiguring home, "working aggressively to create a more balanced assortment between modern and traditional home furnishings, with opening price points and an easy shopping environment, which includes remerchandising the home store by classification in key areas."
The statement also said J.C. Penney's efforts to draw in its core customers "show signs of success, especially during promotional events." Myron Ullman III, the retailer's CEO, added, "Our enhanced messaging is reminding shoppers that J.C. Penney's offering of trusted private brands, key national brands and unique attractions sets us apart from the competition. Over the last six months, we have made significant strides and are now seeing positive signs in many important areas of the business, in spite of what continues to be a difficult environment for consumers and retailers in general."
The company also said its public offering of 84 million shares of common stock, conducted two weeks ago, garnered about $785 million in net cash proceeds. This total will put J.C. Penney's year-end liquidity at more than $2 billion.