Business Insider's Henry Blodget says the company might have just suffered the worst quarter in retail history, and he has a point. Penney's reported a fourth-quarter loss of $2.51 a share, compared with the 24 cent loss that analysts had expected. Same-store sales plummeted 32 percent. Retailers of this size just don't post those sorts of declines (at least the ones that stay in business). Wall Street immediately took notice: Once the news came out the company's stock tanked. It's down almost 16 percent this morning and around 60 percent since CEO Ron Johnson was brought in to turns things around. From the NYT:
While Mr. Johnson's strategy makes "great intellectual sense," he is running out of time, said Chris DeRose, co-author of the business book "Judgment on the Front Line," in an e-mail message. "If customers don't embrace the changes in the next two quarters, the key investors will need to decide if they're willing to sign up for another questionable holiday season," he said. In January 2012, just months after he took over the struggling department store chain after running Apple's retail operations, Mr. Johnson outlined a turnaround that would add stores-within-a-store, step away from sales and promotions, and adhere to a three-tiered pricing plan. He suggested then that Penney needed a little bit of Apple's magic. From the start, there were questions then about whether Penney's customers, who were used to sales and coupons, would be willing to give them up. "Apple stores are destinations with must-have merchandise; JCP doesn't have those benefits," Mr. DeRose wrote. Since then, Mr. Johnson has backed away from some of those goals, saying that Penney will hold some sales and admitting that the pricing plan confused shoppers.
The one thing that Penney did do right was hire Ellen DeGeneres as its spokesperson. Spot below is from a 2012 campaign and it scored very high among viewers.