The vultures are looming in the skies overhead. They smell the foul stench of a dying company. A company that was once an American icon. But times have changed and the company is still operating as if it were the 70s. Fierce competitors have emerged, technology has transformed the way business is conducted and online retailing has changed the equation. Companies that were not born in the times that JCP was profitable, now are thriving because their merchandise has kept pace with changing times, companies like Forever21, Aeropostle, Abercrombie & Fitch, Zara, Nastygal, Black & White, Victoria's Secret offer trendy merchandise hip with the times and on the other side online retailing juggernaut Amazon compete in the housewares, furniture, kitchenware and luggage departments. Traditional retailing giants like Macy's have attracted former JCP customers and with offerings like their Friends & Family program and blowout sales have generated new clientele and retained all their existing ones.
JCP has wasted an enormous amount of money they raised to redo their stores, but the management does not get it at all. They are still selling the SAME merchandise - the quality is cheap, the fashion is not trendy and their target audience of shoppers is one that loves to announce to their highly networked socially-connected world what an awesome deal they got at a particular store. Yes, women talk about their shopping and if a store has poor, inferior merchandise, you can bet that everyone she knows will hear about it.
I am of the opinion that JCP has a very short window of opportunity to resurrect itself. Retailing business is cut-throat and it takes no prisoners. And yes, the vultures are getting closer.
Let's not forget about home goods retailers like Bed Bath and Beyond and Crate and Barrel. When you specialize in just one narrow segment of consumer goods (category killers) it's a lot easier to stay on top of trends. Traditional department stores have an extremely difficult task trying to be all... More
Even the new money raised by JCP recently cannot help the company - their cash burn rate is extremely high, to the tune of 650 million dollars.
276 Million shares traded yesterday with a clear directional move downwards. The big hedge funds are liquidating their positions I would assume. Certainly a cause for grave concern for JCP.
Let's not forget about home goods retailers like Bed Bath and Beyond and Crate and Barrel. When you specialize in just one narrow segment of consumer goods (category killers) it's a lot easier to stay on top of trends. Traditional department stores have an extremely difficult task trying to be all things to all people. Macy's has done so rather well thus far but JCP has lagged badly for quite a while with JCP being especially hamstrung by its dowdy image. It's a classic of having everyone eating part of your lunch. A largely similar situation is happening with Sears. Sears strength had been home appliances but that segment is getting cannibalized by the likes of Lowes, Home Depot, and Best Buy.