The Story of J.C.Penney (NYSE:JCP) Store Closure

Ron Johnson has not proved to be lucky for J.C.Penney Co. Inc. (NYSE:JCP). The Johnson tenure between January 2011 to April 2013 is being coined the most disastrous to date. There have been several fiscal dips during this time, with same-store sales and revenue drop by 20%. So much was the damage done during this stretch that Wall Street doubted if the retailer would see the light of the day again, as a successful brand.

J.C.Penney (NYSE:JCP) did show recovery for a while, with modest returns, however, the fiscal figures seem to be declining again. The current situation that the company finds itself in has raised the concern whether the retailer will return to its days of glory or will become another martyr to mistakes made on the board’s table.

Things are expected to get worst for J.C.Penney (NYSE:JCP), in light of the figures released for the Q3. According to the latest report, the sales totaled up to $2.764 billion, which is a drop from the previous 2.779 billion for the same quarter, last year. This has brought the net loss to a massive $188 million, that will reduce the per share cost by $0.62. This is what has led to a believe that J.C.Penney (NYSE:JCP) may find it bad during the holiday season, which is usually that time of the year that brings about most sales and revenue.

The poorly trends have followed the retailer in to Q4, but the management fails to predict figures that are close to reality, due to their irrational optimism, even in the state the company finds itself, currently.

The company has put down a three point agenda that it plans to put in to action, in the fourth quarter of the current financial year.

Comparison in store sales: this is projected to ascend from 2% to 4%;
Gross margin: compared to last year, the margin is expected to undergo a hike of 500 to 600 points;
SG&A spending: a slight hike, as compared to levels observed last year.

The management at J.C.Penny (NYSE:JCP) as well as analysts are hopeful that the retailer might be saved. But what is still a cause of concern is the position it holds in the current retail market. With each passing day, we see a new retailer establishing itself, just around the corner. With such severe competition, and consumers having extensive choices; it is becoming hard day by day to retain strong position on the charts. The company concerns circle around the losses it will bear in the recent situation, and how badly will it be effected by them.

With a total of 1,060 stores to its name, J.C.Penney (NYSE:JCP) will need to focus on several aspects of the business. As per the recent losses, several of its stores will end up losing capital. It may have to cut down on the number of its stores, as in light of the losses the retailer has suffered, some of these locations may not be able to turn around.