Walter Loeb, a retail consultant and former senior retail analyst at Morgan Stanley, is very worried about JCPenney.
Loeb writes in a column at Forbes entitled "JCPenney slides Further into Oblivion" that he visited the JCPenney store in the Manhattan Mall to see things firsthand.
While he liked the aesthetic changes put in place by CEO Ron Johnson, he was depressed by the lack of customers.
He believes that there are "few reasons for customers to return unless they are given some unusual incentives." After all, the construction of the new shops is going to take a while, and stores will remain disrupted throughout.
Here's his bottom line. From Forbes:
My initial hope was that sales would level off in 2013; I now feel that at the end of fiscal 2013 the company may only have sales of $12 Billion, a loss of $5 Billion from the high point of fiscal 2011. It will however be a different store with good opportunity for growth once the whole transformation is completed. It should appeal to a more aspirational shopper.
... My conclusion is that the company is becoming irrelevant to investors and a liability for manufacturers since they will have to justify discount prices to other customers unless J.C.Penney carries old styles or exclusive models. Right now the company has been driving away its core customers but has yet to capture a new one as the decline in revenues clearly demonstrates.
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