QUOTE AND NEWS
TheStreet.com  Sep 26  Comment 
NEW YORK (TheStreet) -- TheStreet Ratings team reiterates its "sell" rating on J.C. Penneya awith a ratings score of D. The stock was down 4.93% to $9.64 at 2:03 p.m. More than 21 million shares had changed hands, compared to the average volume...
BusinessWeek  Sep 24  Comment 
Ron Johnson helped create some of the most popular—and profitable—stores in the world for Apple. Now he might be moving into deliveries
SeekingAlpha  Sep 24  Comment 
By ColoradoWealthManagementFund: This article is a rebuttal to a recent piece that treated the increase in sales at (NYSE:JCP) as a reversal of fortune for the department store segment. That article can be seen here. Here is a very short synopsis...
SeekingAlpha  Sep 23  Comment 
By Achilles Research: J.C. Penney (NYSE:JCP) is still a highly controversial and contested investment in the retail segment. Bulls and bears aren't conceding just one inch when defending their short or long position in J.C. Penney, as many...
Motley Fool  Sep 23  Comment 
Kohl's has been struggling with declining sales for the past few quarters, and there are a few reasons to believe that the company's problems may continue.
TheStreet.com  Sep 19  Comment 
NEW YORK (TheStreet) -- Shares ofaJ.C. Penneya continued to decline 5.2% to $10.21 on Friday afteraCredit Suissea said Thursday the department store chain could face some difficulties in the near future. "We acknowledge clear progress to date,...
SeekingAlpha  Sep 19  Comment 
By George Hanley: Regional department store operator Dillard's (NYSE: DDS) stay-small operating strategy has been working well for the company in contrast to the operating troubles that continue to plague larger players in the sector like J.C....
SeekingAlpha  Sep 19  Comment 
By Daniel Jennings: The modest recovery at J.C. Penney (NYSE:JCP) demonstrates that the department store business model is far from dead and that the category could present classic value buys. J.C. Penney does seem to have some of the...
SeekingAlpha  Sep 18  Comment 
By Harm Elderman: J.C. Penney (NYSE:JCP) is a major retailer operating over a 1000 department stores all across America. Source: investorweek.com J.C. Penney sells a variety of products like clothing & footwear, accessories, fashion...
TheStreet.com  Sep 18  Comment 
NEW YORK (TheStreet) --aJ.C. Penney shares are down 1.46% to $10.82 on Thursday after analysts at Credit Suisseawarned that the retailer's road to recovery will be bumpy in the near term. "We acknowledge clear progress to date, but we remain...




 

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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