J.C.Penney (NYSE:JCP) Needs To Come Up With Brilliant Ideas If It Wants To Expand Its Customer Base

All the efforts of J.C.Penney (NYSE:JCP), the struggling retailer, went down the drain when the company posted flat numbers for its third fiscal quarter. The company was expecting the numbers to fall in the mid digits, so it came as a big blow. The margins of the company expanded greatly whereas the losses fell considerably. However, the company still has not been able to cover the 30 percent gap in sales that it experienced in the past years. The store traffic is declining. Looks like the company will not get back its customers that it lost during the era of Ron Johnson.

The flat results reported by J.C.Penney (NYSE:JCP) do not look bad when compared with the results of its competitors. The rival companies, Macy’s (NYSE:M) and Kohl’s (NYSE:KSS), both reported narrowed store sales for the third quarter. The comparison is much worse when made with the figures of the past years. If the third quarter of the year 2011 is taken as a base year. The sales figures of JCP dropped to 74% for the same quarter of 2012 whereas for 2013 and 2014, the figures were at 70 percent.

No doubt that Macy’s and Kohl’s also experienced low store sales during the most recent of its quarters, but their figures were far better than the figures of J.C.Penney (NYSE:JCP). J.C.Penney is in a dire need to expand its sales figures to double the digits.

Although the company’s profitability increased during the third quarter, it was still losing a lot of money. The gross margins of J.C.Penney (NYSE:JCP) have gone up considerably; the margins were reported to be at 29.5 percent during the third quarter of the year 2013, but as for 2014, the figures rose to 36.6 percent. The expenses for operations dropped but the company still reported a loss of $188 million. Although this loss seems like a blessing when compared with the loss of previous year- that was $489 million- but the figures should be in a positive.

The company really needs to increase its store sales, and for that, it needs to expand its customer base. J.C.Penney experienced growing sales for the past few quarters, but the number of customers dropped in fact. The company will not be able to fill the $5 billion gap in the sales figures, at least not in the near future; but it should try to come up with innovative ideas in order to not make the situation worse. The company drove its important customers away by ruing its reputation, and so getting them back will not be an easy task. If J.C. Penney wants to report profits, it needs to increase its store sales by expanding the customer base.

As for the stock prices of J.C.Penney (NYSE:JCP), the company, on the last trading day of November 20, 2014, started its stocks at a price of $7.20 and closed at a price of $7.26, after hitting the highest figures of $7.34.