The famous departmental store franchise, JCPenney, is in a bad situation right now, with continued losses in business, addition to the existing size of huge debt and poor cash reserves. The report of earnings stated that the loss for the beginning quarter stood at $60 million, while the sales came down by 4%. Both of these values are below the anticipation of the Wall Street, solidifying the fact that JCPenney does not have much time on hand.
The major problem being faced by JCPenney is trying to adjust to the new trend in retail sector that an increasing portion of populace is purchasing things online. Sears and other competing companies are also facing the same situation and hence struggling helplessly.
After closing down close to 140 stores and firing at least 5000 people in previous year of 2017, JCPenney got rid of 360 people working out of their headquarters as well as stores. The tally of remaining stores stands at 860.
While other major players in retail market like Target, Walmart, Macy’s and Best Buy have tried to successfully change their games in order to be able to compete with Amazon, the current leader in the online retail sector, JCPenney seems to be struggling in trying to maintain pace. Due to this, while investors are positive about the other players, they are worried about JCPenney.
Recently, the Chief Executive Officer of JCPenney, Marvin Ellison, stated that an important reason for bad sales was a delayed spring and comparatively cooler April temperatures than the average. On the other hand, the competitor Macy’s did not face any problems due to the cooler temperatures as evident from the statement of Jeff Gennette, the CEO of Macy’s.
Due to all these, the stock of JCPenney went down by 10% and now costs $2.8 per share.