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Despite reboot, JCPenney still struggling

May 17, 2012

It's not looking good for JC Penney despite its new look and goal to turn around sales. The company reported Tuesday that its first quarter loss was bigger than expected and that sales were down 20 percent. The company is discontinuing its dividend, and the markets responded the following day with a 20 percent drop in share value, its biggest drop in more than three decades, according to a story on homeaccentstoday.com.

"Our first 90 days are a little tougher than we expected," CEO Ron Johnson said. "We expected the sales to be down double digits. They are at the low end of that range, of our expectation."

Johnson attributed the decrease in sales to the replacement of coupons and discounts with a new pricing and promotional strategy that the company needs to better promote.

The transformation, which includes changing 47 percent of the retailer's merchandise by August, is ahead of schedule, however. "What the teams at JCP have accomplished internally with our vendor partners in the stores in 90 days has shattered any expectations I had for what a 110-year-old organization to do," he said.

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