The Retail Cliff
Warren Shoulberg -- Home Textiles Today, 2/11/2013 2:00:00 AM
ADD JCP (the retailer formerly known as J.C. Penney, aka The Penney Company) to the ever-growing list of entities teetering on the cliff. No, the company is not going bankrupt, much less out of business, and chances are a retailer known as Penney's will exist for some time to come.
But like our beloved legislators in Washington, D.C., the executives for the company at Plano, Texas, headquarters are rapidly approaching their own special cliff. And that journey begins this month.
That's because February is the first anniversary of the great Johnsonian transformation of the company, and this is the month when Ron Jon's JCP starts to go up against its own very sad, very sorry comp-store sales numbers. It if can't beat them, the gig could be up.
It was a year ago that the retailer dropped its entire promotional calendar and virtually everything about its previous merchandising strategy - save for a few minor details ... like all the product being sold in the stores ... and all the stores themselves.
Over the ensuing 12 months there have been various twists and turns, retractions and infractions of that original strategy and I think it's fair to say that the confusion in the minds of the company's customers is only exceeded by that being experienced by its employees and suppliers. Most don't have a clue what is actually the plan.
None of it mattered all that much as the retailer operated under the guise of being in its Wonder Years, growing into the store it wanted to be. (Again, the fact that the trade thought of wonder in terms of "I wonder what's going on?" is yet another interpretation.)
Just wait, Ron Jon kept saying, just wait until next year, sounding like the eternal Brooklyn Dodger fan. We are going to be amazing starting next spring.
Well, February is not quite spring, but it's the start of the second year for the Great JCP reinvention and it's when we're supposed to start seeing Johnsonism really kick in.
JCP will of course have to do it, at least in home, largely without the services of one Martha Stewart. Her minions may be behind the scenes developing product and applying birds egg blue tinting to all manner of goods, but the consumer won't see Miss Martha's smiling persona on very many products. She remains tangled up in court with Macy's and even if the ultimate result is favorable for JCP, it may end up being moot in its timing.
And as the big roll-out of the rest of home keeps getting pushed back to April and May and whenever, those negative comps could be looming large in the meantime. (Not that we'll know that instantly: the company wisely stopped reporting monthly comps last year.)
But eventually the fat auditor is going to sing and one has got to think lead investor Bill Ackman will hear it before we do.
He'll be the one on the top of the Retail Cliff ... pushing or pulling. Either way, we're getting closer to the edge.
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