J.C. Penney posts large loss as sales sink further

“The bill for J.C. Penney Co.’s first year under Chief Executive Ron Johnson is in, and it’s about $4.3 billion,” Dana Mattioli reports for The Wall Street Journal.

“That’s how much sales at the department store chain dropped in the 12 months after the former Apple Inc. executive cut back on discounts and rolled out a plan to fill stores with dozens of branded boutiques,” Mattioli reports. “Declines worsened through the year, with sales down 28.4% from a year earlier in the fourth quarter, which spans the crucial holiday selling period. The company reported a fourth-quarter loss of $552 million, its worst of the year, and held $930 million in cash on Feb. 2, a decline of 38% from a year earlier. For the full fiscal year, Penney had a loss of $985 million, compared to a $152 million loss the year before.”

Mattioli reports, “The results are a comedown for Mr. Johnson, who arrived with great fanfare from Apple in November 2011 with ambitions to remake a chain that had sold inexpensive clothes to middle-American shoppers for decades… On Wednesday, he backtracked significantly on his plan to limit discounts, telling investors the company will start holding regular sales. ‘We’ll offer sales each and every week as we move forward,’ the CEO said on a conference call to discuss the results.”

Read more in the full article here.

MacDailyNews Take: Yeesh.

Related articles:
JC Penney CEO Ron Johnson capitulates, brings back sales – January 28, 2013
Apple retail’s Ron Johnson and John Browett have proved the Peter Principle is alive and well – November 13, 2012
CEO Ron Johnson switches J.C. Penney to two-tier pricing with price-match guarantee – July 26, 2012
Why is Ron Johnson’s retail strategy for J.C. Penney failing? – June 26, 2012
J.C Penney’s stock tumbles after key exec’s abrupt exit – June 19, 2012
J.C. Penney reports loss and plummeting sales in 1Q – May 15, 2012
Why Ron Johnson left Apple to head JC Penney – April 30, 2012
J.C. Penney lures another executive from Apple – April 26, 2012
Steve Jobs’ ex-lieutenant Ron Johnson adds $1.5 billion to J.C. Penney in two days – January 30, 2012
J.C. Penney CEO Ron Johnson: What I learned building the Apple Store – November 21, 2011
New J.C. Penney CEO Johnson hiring former Apple co-workers – November 9, 2011
Why Apple’s retail genius Ron Johnson is paying for the privilege of running J.C. Penney – June 15, 2011
Apple’s retail store chief Johnson off to J.C. Penney; expected to become CEO within months – June 14, 2011


    1. But the real Ken Segall story is about Apple’s lousy advertising. Remember this is the man who came up with the name iMac as well as Apple’s iconic Think Different campaign. So he knows what he’s talking about. He says in no uncertain terms, that Samsung is steam rolling Apple with its advertising. Something that many here have said for a long time. Certainly including me. But this guy is the advertising genius so he should know. I don’t know who to fault for this failure but Apple is failing miserably in this respect. I have been giving Tim Cook the benefit of the doubt so far. But he is the CEO so I guess at some point he has to start being responsible for failures. Especially this big. As Segall says, Apple just keeps running the same old product commercials while Samsung goes for Apple’s throat. And Samsung is winning. Apple should be smart enough to craft commercials that fight back without looking defensive. I saw this article at Apple insider. Sure didn’t see it here.

    2. Ron Johnson has had an uphill battle to communicate his vision. The first round of ads after he took over (the ones with people screaming at their mail boxes) made no sense at all. I didn’t get the message until I watched his presentation to the financial community. Most people never watched that presentation and will never understand those ads.

      His vision is brilliant, but he is working within a corporate culture of cluelessness. The executive that shared the stage with him at that presentation was a prime example and the contrast was night and day. It went from Johnson doing an Apple product rollout type sharing of his vision, with a few sparse, but deep, graphics to the “suit with the forgotten name” reading a Power Point deck of bullet points and spreadsheets. He was gone shortly after.

      The task of converting 1,100 stores pales in comparison to converting the minds of 160,000 employees who have had careers built on selling crap on sale to ones eager to sell goods of value for the same price, every day. That will be hard. But the proper comparison is not Johnsons work at Apple, but his work at Target. I hope he is able to keep on trying. The brand will be better for it.

  1. Why do we care about this? On a day that the stock market reached a five year high, AAPL takes another tumble because that company’s CEO opened his mouth again. This is going to continue until he’s gone. iCal this!

    1. I think every retailer on the planet could see negative results if they change too quickly. So yeah, that’s part of the equation.

      It just might not have been a good fit for Johnson who was used to a consumer that values quality over price. It seems like he wanted consumers that valued Target’s low-budget, almost-designed products instead of what JCPenny already had.

  2. There’s something I don’t understand:

    Why the rejoice in Ron Johnson failing? Because he left Apple?

    He made a choice. He did not steal from Apple nor betray anybody. He didn’t do anything illegal or unethical. It’s not like he went to design Microsoft Stores or Google Stores.

    Is it “you’re in Apple, best of lucks to you”, but “you go out, we hope you fail miserably”?

    JC Penney is not even an Apple competitor! Come on, people! It’s a very screwed up way of thinking. I honestly don’t share that feeling.

  3. Give the guy an A for effort and an F for market research.

    1-Enclosed malls are dying in America and I cannot recall seeing a JCP anywhere but in an enclosed mall.
    2-Income among wage earners has been flat to down for more than a decade in the US. Not a great time to move upmarket.
    3-The upscale customer JCP seeks do not want to be seen shopping in JCP stores.
    4-The fickle trendy teen & college market kids would rather lick a toilet than be seen shopping in a JCP store. No cool factor for the lemmings.

    The truth is that the people with the money to spend go elsewhere.

  4. Someone needs to go back and watch the keynote Ron did when he first joined JCP. He didn’t say he was going to stop sales. He said he was going to run month long sales so people could shop at their leisure and not based on a weekend ad. It was that misconception that was portrayed in the media and whatI blame for the lack of customers. I know I started shopping at JCP more since he took over. The stores are clean. the prices are great and the quality cant be beat.

  5. Apple products sell themselves. There is no comparing them and JCP. JCP was a sinking ship before Johnson got there and that hasn’t changed. They are an outdated dept store thats heyday is centuries gone, and its not coming back

  6. 1. Once people get used to seeing ‘On Sale’ or whatever percent discount, and then to take that away, even though it might be a supposed better strategy to the talking heads running the company, would fail, especially in this economy. It’s just a perception that you are getting a better deal with on sale attached.
    2. JCP stores are stale, and outdated, much like sears. They need a major makeover.

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