Tomahawk, WI 02/04/2014 (BasicsMedia) –To say that J.C. Penney Company Inc (NYSE:JCP) has endured a torrid 2013, would be an understatement of sorts. The company has struggled to stay inn business, and no matter what strategy it has applied to remedy the situation, nothing has seemed to be anywhere near working as well as JCP wanted. For a company with a market cap of around $1.8 billion to struggle in the manner that JCP has done, is a pointer that the problems facing it are wide and complicated. If you thought that the company had no more bad news to dish out, you will be disappointed.
The recent announcement that J.C. Penney Company Inc (NYSE:JCP) intends to close around 33 stores, and lay off some 2,000 workers, is an indication that it is in a deeper slump than many had thought. The company has announced that if all goes well, and nothing stands in its way of closing those stores as well as cutting the jobs it has planned to, by the end of the year, it will have saved close to $65 million. Not only that, but also JCP hopes to keep saving this much money every year until it somehow manages to change the worrying trend that it is caught up in fighting.
For the oldest retailer in the US, what JCP has endured of late, in terms of management and investment turmoil, is worrying, to say the least. It fired its CEO, only to hire his predecessor. It went ahead to carry out a new retail strategy, whose single success, was to alienate JCP’s core group of customers. Finally, when it got tired of all these new yet ineffective strategies, it went back to its old strategy. The outcome of all these changes is that JCP saw its stock lose close to 80 percent of its value in the last couple of years. Bad news is that the bad run is far from over.
However, one thing that is worth mentioning is that J.C. Penney Company Inc (NYSE:JCP) will not just be closing any store. It has only targeted the underperforming stores for closure, which is a bit strange considering that none of the rest appear to be performing to the expected levels. Remember that JCP stores are spread in more than 1,100 locations, and all of them face extensive difficulties, which will not end any time soon. According to analysts, if JCP intends to close all underperforming stores, it is unclear how many it will have remaining in operation at the end of this whole exercise.
J.C. Penney Company Inc (NYSE:JCP) had hoped that the recent holiday season would lead to better sales, just as it normally happens during such periods. However, this never came to be. JCP together with other major retailers all complained of poor sales during the just concluded holiday season. Just as JCP has done, the other major retailers have shot down their profit forecasts for the upcoming quarters. Sears Holdings, which is another of J.C. Penney Company Inc (NYSE:JCP) peers in terms of providing retail goods, announced that its holiday sales dropped by as much as 9.2% compared to the similar period the previous year.