The retailer implemented a strategy that just may point to a surprisingly bright future.It’s been a rough few years for Macy’s, Sears and JCPenney - the holy trinity of department store anchors - and it has certainly seemed like the curtain was officially coming down on them on a few separate occasions. Shifting consumer behaviors, behind the times business models and several other issues have left these giants wishing they could turn the clocks back about a decade or so, but one of them has dusted itself off and implemented a strategy that just may point to a surprisingly bright future. As Bloomberg reports, that retailer is JCPenney, and they just may find themselves in the best position of all three of these behemoths when all is said and done.
For confirmation, we need to look no further than the stock market price of all three companies. Shareholders are liking what they see from JCPenney, and that’s led to an incredible 50% increase in 2016. For comparison, Macy’s has risen 12% - largely off of the strength of recently announced changes in the retail giant’s plans, while Sears has dropped an alarming 32% over the same time frame.
“When I joined the company, my first thought was, ‘Man, we’ve got a lot of stores to close.’ It was the opposite.’’ said Marvin Ellison, who became president in 2014 and CEO last August.
Ellison implemented a series of changes, including an increased focus on mall negotiations, merchandise changes, and the elimination of his predecessor’s unprofitable decisions. The results have been a massive increase in the company’s bottom line, and a company that sounds pretty reenergized and comfortable with its path ahead.
“They have really unique opportunity, given there’s a strong employee commitment to service and a customer focus,” observes Oliver Chen, an analyst at Cowen & Co.
In addition to improved customer service initiatives, the company has also identified the merchandise areas in which it can find the most success: beauty, home goods and special sizes. That lines up perfectly with the store’s core demographic - about 70% of the retailer’s shoppers are women - and positions the retailer to become a go-to destination for that segment of the population.
JCPenney has also stepped up its efforts in the world of online shopping, and has also successfully integrated that within its stores. Roughly half of all of the company’s online sales are routed through the physical stores in some way. Add it all up, and it looks like JCPenney has warded off the grim reaper - and they may just grow even bigger as the other behemoths reduce their footprints.