QUOTE AND NEWS
Forbes  Nov 21  Comment 
Anyone who has visited a J.C. Penney Company (NYSE:JCP) store recently will probably have noticed that the shop floor is well stocked with the right stuff-- Liz Claiborne, J. Ferrar, Stafford, and the like -- and sale signs that are placed...
Motley Fool  Nov 21  Comment 
The retailer's stock has soared this year, and there are two big reasons it could keep rising over the long term.
Benzinga  Nov 20  Comment 
Speaking exclusively to Benzinga, Belus Capital Advisors CEO Brian Sozzi said that though the retail sector earnings results themselves have not been that great, getting on conference calls with some of these companies has shown a different light....
Motley Fool  Nov 20  Comment 
Aside from a few hiccups the department store chain's turnaround remains on track
Motley Fool  Nov 20  Comment 
J.C. Penney failed to grow sales during the third quarter, and store traffic continued to decline. Here's what it means for the troubled retailer.
Benzinga  Nov 19  Comment 
Imperial Capital commented on J C Penney Company Inc (NYSE: JCP) Wednesday and maintained an Underperform rating and $3 price target. Analyst Mary Ross Gilbert saw a turnaround gaining traction in FY 2015 but also saw the retail climate as...
TheStreet.com  Nov 18  Comment 
NEW YORK (TheStreet) -- J.C. Penney shares are up 1.7% to $7.37 on Tuesday following a note from analysts at Sterne Agee that praised the company's cutbacks but warned against a bullish outlook for the fourth quarter financial period. Analysts...
MarketWatch  Nov 18  Comment 
J.C. Penney’s ‘equity-inducement’ deal will vest gradually over the next three years, unless he’s fired without cause or quits for good reason -- then it vests immediately.
Motley Fool  Nov 17  Comment 
These underdog stocks have the potential to turn around their bad fortunes with hidden value.




 

J.C. Penney (NYSE: JCP) is a leading department store retailer of apparel, accessories and home furnishings. They produce their own private brands in addition to selling products from other companies.

The company has faced changing consumer tastes in the past years--consumer traffic is being drawn to Wal-Mart (WMT) and Target (TGT) at the expense of department stores such as J.C. Penney and Macy's Inc. (M). In addition, J.C. Penney relies heavily on private labels[1] Although private label products--in order to appeal to as many customers as possible--are not unique enough to compel fashion-conscious consumers to purchase them, they are still a viable option for customers who do not follow trends. JCP also faces lower profit margins in the due to rising commodity costs which will increase its clothing costs.

Business Overview

The company divides its merchandise into several categories which include: men's, women's and children's apparel, accessories and cosmetics; home furnishings; leisure and recreational equipment; jewelry and watches.[2]


Business Growth

Trends and Forces

Private Brands Not Unique Enough to Differentiate from Cheaper Alternatives

Private label brands are produced exclusively for a particular store. For example, J.C. Penney has a number of private label brands including Arizona Jeans Co. and Stafford.[3] Retailers such as Macy's and J.C. Penney find private labels very attractive because the pieces often have higher margins than branded merchandise from other companies. However, the economic crisis of 2008-2009 has made people more reluctant to spend. When consumers have less money to spend, they will be more inclined to spend it on something that excites them. Private label brands, in an effort to appeal to as many consumers as possible, are less likely to spur a person to buy them when disposable income is already scarce.[4] Also, the proliferation of discount retailers such as Wal-Mart, Target and Kohl's (some with their own exclusive brands) means that consumers can trade down to another store if they can no longer afford prices at J.C. Penney. Private label merchandise, by its nature, is not differentiated enough to keep fashion-conscious consumers purchasing them in lieu of lower-priced alternatives.

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Competition

J.C. Penney's main competition is mid-tier department stores such as Macy's Inc. (M) and Kohl's (KSS).

  • Macy's Inc. (M) has a higher price point than J.C. Penney and sells more exclusive brands. Although both companies produce private labels, they make less of a contribution to Macy's total sales than they do J.C. Penney. [5] [6]
  • Kohl's (KSS) is slightly smaller than J.C. Penney, both in terms of sales and locations Kohl's also operates at a slightly lower price point. Kohl's position as a discount retailer makes it more attractive for recession-stricken consumers who are looking to save money. Although it has fewer locations than J.C. Penney the fact the company sells its goods online means it is not at a large disadvantage to the larger retailer in terms of accessibility.[7]


News

  • On July 27, 2011 marketing chief Mike Boylson retired after 32 years working with JCP and 8 years serving in his former position. This will be first time Ron Johnson, who was appointed chief executive of JCP in November 2010, makes a senior-level appointment.[8]

References

  1. JC Penny 2009 10-k p.22
  2. JCP 2008 Annual Report pg. 2  
  3. JCP 2008 Annual Report pg. 2  
  4. Alexandria Sage. ANALYSIS - Private label eclipsed by brands in US retail slump.
  5. M 2009 Annual Report  
  6. JC Penny 2009 10-k p.22
  7. Discount Retailers Thriving in Recession.
  8. [1]
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