When higher-end department stores like Macy’s and even Nordstrom are struggling, it’s understandable that JCPenney might have another tough quarter trying to bring in new customers, get the ones it has to come in and spend more often, and find things to sell that customers can’t just go buy online instead.
JCP shared its quarterly results today, and sales weren’t bad exactly, but also didn’t grow significantly. The chain reported that sales were up 2.2% at the same stores: not impressive, but an improvement over the chain’s last decade or so of results. Under business logic, the company’s share price went up after it reported having lost $56 million in the last quarter.
The chain does have a plan for success, which maybe hasn’t had a chance to fully take effect yet. Earlier this year, the company added appliances back to its product mix in some stores, adding them in even more stores after the new offering was a hit.
While it might seem counter-intuitive to become more like Sears at the same time that Sears isn’t doing well, it’s a smarter move than it appears at first: as Sears shrinks and tries to launch its second mini-chain of appliance stores, there’s room for some retailer to sneak in and sell major appliances.
That appliance-seller could be CEO Marvin Ellison’s most recent former employer, Home Depot, or it could be JCPenney. Home goods are already one of the chain’s top divisions, so selling more stuff for homes just makes sense.
By the way, the chain’s best-performing division? The Sephora mini-stores inside many JCPenney stores. The company has tried expanding into stores-within-stores from other brands, but the format that has been many markets’ first experience with Sephora stores is successful and lucrative.
J.C. Penney Reports Another Loss, Weak Sales Growth [Wall Street Journal]
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