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Hope J.C. Penney Isn't Next

Old 12-12-18, 07:00 PM
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mmarshall
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Default Hope J.C. Penney Isn't Next



I recently did a thread on the bankruptcy of Sears, although I wasn't a big fan of the company, and the only thing I can really remember buying there in the last 10-15 years or so was a new Maytag washer. Excellent machine, though......except for a couple of broken plastic hinge-pieces for the lid, it still runs like the day it was built. Very pleased with it. My late father, decades ago, ordered a Marshall family plaque, mounted on wood, out of the old Sears catalog, back during its heyday in the 1950s and 1960s. The day it was delivered, he took it out of the package, took one look at it, turned around and said to my late mother..."Irene, this thing looks like exactly where it came from...Sears & Roebuck". (wonder why he even ordered it from them in the first place?)

Unlike Sears, though, I AM a big fan of J.C. Penney.....IMO an excellent retailer. I've liked them for many years.....they aren't as low-priced as Wal-Mart or Target, of course, but they have decent quality merchandise at reasonable prices. They also have one thing I particularly like.....a Big & Tall Men's shop where they have (again) decent quality clothing at reasonable prices. I say reasonable because, while not as low-priced as Walmart or Target, they are much more reasonable than the traditional Big & Tall Men's shops, like Austin's and the now-defunct Steven Windsor, which really gouged you through the roof on prices. They don't have everything there at J.C. Penny's for big and tall guys (for instance, it's sometimes hard to find big oversize suit-jacket/coats there), but what do have (and it is a pretty wide choice) is pretty nice stuff....especially for the money. In addition, they regularly have big sales......much of their stuff is marked at either half-price, by one and get one free, or buy one and get 50% off...I buy very few things at retail there, simply because of their ever-present markdowns and the coupons they send you in the mail for an (additional) 15-20% off, over and above the half-price markdowns. But you have to read the coupons carefully, as they often omit many of the most common brands like Nike or Adidas. Their retail prices aren't particularly cheap if they aren't marked down, but, any given moment, more than half of everything in the store seems to be on sale....BIG markdowns. That's just the way they seem to operate...mark things up and then sell everything at half-price. It's not a scam, though, when you look at what it actually costs you, out the door...not the absolute cheapest, like at Wal-Mart, but quite reasonable. J.C. Penney's customer service is also head and shoulders above that of Wall-Mart. I've got nothing against Wal-mart's personally (I myself do a lot of shopping there), but perhaps you get what you pay for....half of the employees and managers in the place can't speak English, and the ones that do often don't know where the item you are asking about is located.

Unfortunately, though J.C. Penny's has been able to hold on this long in the face of fierce competition from cheaper stores and the proliferation of on-line ordering, its future is by no means guaranteed, and just as Montgomery Ward bit the dust years, ago, and Sears earlier this year, I just hope that they aren't next. Bad enough losing my favorite car(s) in the years to come......don't want to have to add my favorite traditional retailer to it.

Last edited by mmarshall; 12-12-18 at 07:06 PM.
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Old 12-12-18, 07:38 PM
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I shop all the time at JC Penney when I am in Rochester and have the time. IMO, they are going to eventually go out of business. The quality and products are OK at best, customer service is just average but the bigger problem is that the younger generation do not seem to want to shop at big department stores. It's just a matter of time. I only go there because department stores have been around my whole lif .
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Old 12-12-18, 08:01 PM
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I hate to be the bearer of bad news, but if you want a sure bet, I'd short JCP stock. There's just no way they will survive. It will be a combination of their own shortcomings, the outright demise of mediocre malls across the country, and experiences like Amazon Go showing how the customer wants to interact (for the most part). I predict bankruptcy by mid 2020 and extinction shortly after.

Their stock price has gone from $82.85 in Feb 2007 to $1.38 today (it was $77 in 1998 for reference of the pre-internet shopping frenzy). Their stock jumped about 10% in mid-October when they announced yet another new CEO (Jill Soltau- from Joann fabric) to $1.75 - so that means it is down about 25% in 2 months. The CEO position has been incredibly unstable for JCP, their stores are often dated, they often carry way too much of strange inventory, and 20% of the malls in America account for 72% of all mall revenue generated (pretty darn close to Pareto principle). The thriving malls tend to be ones with stores like Saks, Bloomingdales, Nordstrom as anchor stores. Therefore, JCP may be forced into extinction by the sole fact that they are anchored to the wrong type of mall and the entire mall will shut down (some projections are 20 to 30% of malls in US will shut down in next 3 years).

Ironically, I went to the mall tonight for the first time in a long time. It was a very odd experience - what took me 90 minutes (15 minutes each way + 60 minutes of walking, standing in line to pay) could have been done online in 3 minutes. I was buying gift cards and would prefer to give the physical card instead of printing something from an online order - but it reminded me of how outdated so many malls are. Aside from finally finding a pair of tennis shoes I like (after 3 unsuccessful fits from online ordering), it really felt like a huge waste of time, and frankly was a bit frustrating at times.

Unless JCP does some radical things (few ideas below), I don't see them hanging on for long.
- Change how their gigantic retail spaces are used (use this opportunity to create space for today's web-based shopper who wants to order online and have the option of an incredibly efficient in-store or valet pick up service like Target, etc)
- Proximity & intelligent marketing using technology like bluetooth and beacons
- Drastically reduce the amount of inventory in their stores - become more of an online business that learns their customers better by their online buying habits and stocks each store using intelligent data driven insights at the zip code level
- Watch and learn what the customer wants as a retail experience by visiting Amazon Go stores
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Old 12-12-18, 08:04 PM
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Originally Posted by LexsCTJill View Post
I shop all the time at JC Penney when I am in Rochester and have the time. IMO, they are going to eventually go out of business. The quality and products are OK at best, customer service is just average but the bigger problem is that the younger generation do not seem to want to shop at big department stores. It's just a matter of time. I only go there because department stores have been around my whole lif .

Though I don't relish the prospect of losing Penney's, I agree that they will have a very difficult environment. And you are correct that you don't see many younger people there.....it's mostly people middle-age and up. Like you, though, I'm still a firm believer in buying many things at the store, in person. Being retired, I drive mostly in the late morning and early afternoon, and avoid the morning and evening rush hours (traffic around here is bad enough, even apart from the peak-rush). I don't like the idea of buying stuff on-line that you really need to sample first in person...like trying on clothes. Even if you generally know your waist and clothes-sizes, the same S, M, L, XL, XXL, XXXL, etc..... can actually vary in size among different manufacturers. And, of course, you need to look at the type of fabric it is made from......cotton will tend to shrink the first time you wash and dry it, so you have to leave a little room for that shrinkage. You can't do that buying stuff on-line.
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Old 12-12-18, 08:04 PM
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Originally Posted by LexsCTJill View Post
but the bigger problem is that the younger generation do not seem to want to shop at big department stores.
Exactly. Look at how fast those kids are running away from JCP in the photo mmarshall posted..!
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Old 12-12-18, 08:24 PM
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Originally Posted by jrmckinley View Post
I hate to be the bearer of bad news, but if you want a sure bet, I'd short JCP stock. There's just no way they will survive. It will be a combination of their own shortcomings, the outright demise of mediocre malls across the country, and experiences like Amazon Go showing how the customer wants to interact (for the most part). I predict bankruptcy by mid 2020 and extinction shortly after.
Well, that's one reason why I did this thread. I know that there is a significant chance of that bankruptcy, though I wouldn't say its a sure thing (and I don't own any JCP stock) . There are still plenty of people like me who shy away from buying stuff on-line, for the reasons I mentioned to Jill, just above.


20% of the malls in America account for 72% of all mall revenue generated (pretty darn close to Pareto principle).
A number of those malls are here in the D.C. area, a result of the traditional affluence here. Big money.....big malls.



The thriving malls tend to be ones with stores like Saks, Bloomingdales, Nordstrom as anchor stores.
I don't see how Nordstrom survives. They have a branch called Nordstrom Rack.....which, IMO, would be better-named Nordstrom Racket. I gave them up...prices way too high, and quality too low for those prices.


Therefore, JCP may be forced into extinction by the sole fact that they are anchored to the wrong type of mall and the entire mall will shut down (some projections are 20 to 30% of malls in US will shut down in next 3 years).
Perhaps....but I'd be surprised the malls shut down in this area. They still get a lot of store-traffic, despite the fact that Sears folded.

Ironically, I went to the mall tonight for the first time in a long time. It was a very odd experience - what took me 90 minutes (15 minutes each way + 60 minutes of walking, standing in line to pay) could have been done online in 3 minutes. I was buying gift cards and would prefer to give the physical card instead of printing something from an online order - but it reminded me of how outdated so many malls are. Aside from finally finding a pair of tennis shoes I like (after 3 unsuccessful fits from online ordering), it really felt like a huge waste of time, and frankly was a bit frustrating at times
You obviously went at the very height of the busiest season of the year. Most of the time, you'd probably be in and out long before that 60 minutes. In fact, I was in and out of JCP today in about 30 minutes.....even after stumbling around the Men's Department, looking at a number of different long-sleeved Big & Tall shirts and trying them on, and standing in line, chatting with other customers, waiting for the checkout.

Unless JCP does some radical things (few ideas below), I don't see them hanging on for long.
- Change how their gigantic retail spaces are used (use this opportunity to create space for today's web-based shopper who wants to order online and have the option of an incredibly efficient in-store or valet pick up service like Target, etc)
- Proximity & intelligent marketing using technology like bluetooth and beacons
- Drastically reduce the amount of inventory in their stores - become more of an online business that learns their customers better by their online buying habits and stocks each store using intelligent data driven insights at the zip code level
- Watch and learn what the customer wants as a retail experience by visiting Amazon Go stores
I hear what you are saying, but they seem to appeal to people like me who are wary of buying things sight unseen or sampling them in person. I like to know exactly what I'm getting before I pay for it. Some things, you can safely buy on-line, but IMO clothes are not among them.

Last edited by mmarshall; 12-12-18 at 08:28 PM.
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Old 12-12-18, 08:28 PM
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Originally Posted by jrmckinley View Post
I hate to be the bearer of bad news, but if you want a sure bet, I'd short JCP stock. There's just no way they will survive. It will be a combination of their own shortcomings, the outright demise of mediocre malls across the country, and experiences like Amazon Go showing how the customer wants to interact (for the most part). I predict bankruptcy by mid 2020 and extinction shortly after.

Their stock price has gone from $82.85 in Feb 2007 to $1.38 today (it was $77 in 1998 for reference of the pre-internet shopping frenzy). Their stock jumped about 10% in mid-October when they announced yet another new CEO (Jill Soltau- from Joann fabric) to $1.75 - so that means it is down about 25% in 2 months. The CEO position has been incredibly unstable for JCP, their stores are often dated, they often carry way too much of strange inventory, and 20% of the malls in America account for 72% of all mall revenue generated (pretty darn close to Pareto principle). The thriving malls tend to be ones with stores like Saks, Bloomingdales, Nordstrom as anchor stores. Therefore, JCP may be forced into extinction by the sole fact that they are anchored to the wrong type of mall and the entire mall will shut down (some projections are 20 to 30% of malls in US will shut down in next 3 years).

Ironically, I went to the mall tonight for the first time in a long time. It was a very odd experience - what took me 90 minutes (15 minutes each way + 60 minutes of walking, standing in line to pay) could have been done online in 3 minutes. I was buying gift cards and would prefer to give the physical card instead of printing something from an online order - but it reminded me of how outdated so many malls are. Aside from finally finding a pair of tennis shoes I like (after 3 unsuccessful fits from online ordering), it really felt like a huge waste of time, and frankly was a bit frustrating at times.

Unless JCP does some radical things (few ideas below), I don't see them hanging on for long.
- Change how their gigantic retail spaces are used (use this opportunity to create space for today's web-based shopper who wants to order online and have the option of an incredibly efficient in-store or valet pick up service like Target, etc)
- Proximity & intelligent marketing using technology like bluetooth and beacons
- Drastically reduce the amount of inventory in their stores - become more of an online business that learns their customers better by their online buying habits and stocks each store using intelligent data driven insights at the zip code level
- Watch and learn what the customer wants as a retail experience by visiting Amazon Go stores
Good summary.

The end part of what stores can do was interesting. I do think stores will figure out what they need to do to make the stores survive. I think the future will be just a showcase type store with perhaps some inventory etc.
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Old 12-12-18, 08:29 PM
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Originally Posted by jrmckinley View Post
Exactly. Look at how fast those kids are running away from JCP in the photo mmarshall posted..!
Nice catch with the kids running away from the store. Lol.
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Old 12-12-18, 08:32 PM
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Originally Posted by jrmckinley View Post
Exactly. Look at how fast those kids are running away from JCP in the photo mmarshall posted..!

For one thing, there's not a lot a whole lot of the type of merchandise in Penney's that young kids would be really interested in. Toys R Us used to the THE store for Christmas-shopping for the kids, but even they went belly-up.
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Old 12-12-18, 08:34 PM
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Originally Posted by LexsCTJill View Post
I shop all the time at JC Penney when I am in Rochester and have the time.


Do you agree that it's a place with better-quality stuff than Wal-Mart...at slightly higher, but still reasonable prices if you stick to their sales?
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Old 12-12-18, 09:29 PM
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Originally Posted by mmarshall View Post
Do you agree that it's a place with better-quality stuff than Wal-Mart...at slightly higher, but still reasonable prices if you stick to their sales?
Yes. I agree JC is better quality than Walmart. I think there is a place for Walmart and there is a place for JC. You're a smart and savy shopper if you are using coupons and not paying full price for clothing BTW.

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Old 12-12-18, 09:57 PM
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I've no use for jc penney (stupid name and spelling too).

don't agree with you at all mmarshall about anything in this thread, especially about nordstroms which is more like visiting a lexus dealer, compared with jc penney which is more uncle vinnie's used car lot. i love dillard's too if i *have* to shop in a dept store because there's always knowledgeable staff who can point me to or help me get what i'm looking for. finding good and available staff in stores like jc penney and (shudder) macy's is sometimes hardee than finding bigfoot.
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Old 12-13-18, 06:37 AM
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Surprised on the Nordstrom Rack(et) experience mmarshall - those stores are simply overflow of what isn't selling in the regular Nordstrom stores plus some merchandise from brands carried at Nordstrom that aren't quite "nice enough" to go to a regular Nordstrom (I buy all of my T-shirts there - from brands represented at regular Nordstrom stores but they just don't sell their T-shirts at Nordstrom). Anyway, I actually feel Nordstrom Rack is a great chance to get quality brands at around 50% off of what I'd pay at Nordstrom. In highly affluent areas, Nordstrom Rack can be a gold mine.

And - I completely understand your view on wanting to try things on - the counter point is.... once you find a couple of brands where you trust the fit and know your size, just order online and most places are doing free shipping & free returns, so I simply buy about 10-20 things at a time, knowing I may only keep 5. Doesn't cost me anything to do it and is incredibly convenient.
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Old 12-13-18, 06:55 AM
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Originally Posted by bitkahuna View Post
i love dillard's too if i *have* to shop in a dept store because there's always knowledgeable staff who can point me to or help me get what i'm looking for. finding good and available staff in stores like jc penney and (shudder) macy's is sometimes hardee than finding bigfoot.
LOL, this is very true. Customer service is lacking at so many dept stores. I began boycotting Macy's about 10 years ago after numerous "challenging" times dealing with them both in-person and online where they continually messed up things on our wedding registry. I lump Macy's, JCP, and Sears together- stores feel disheveled, old, they have the world's largest cash registers (reminds me of ones from the late 1980's), and staff is either not helpful or nowhere to be found. I like an Apple store experience (Nordstrom Rack actually does this also)- employees are easy to find, knowledgeable, and they have the ability to let me pay by card right there instead of having to wait in line for a register.

How about a retailer that would install CC machines in/around dressing rooms - so you try stuff on, scan your own barcode of the items you want, then swipe your credit card to pay. Receipt prints, you throw it in a bag and show it to an employee for verification and matching of items on the way out. I hate waiting in line - brands that shake up this process will appeal to the modern consumer.
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Old 12-13-18, 07:38 AM
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Originally Posted by bitkahuna View Post
I've no use for jc penney (stupid name and spelling too).


Well, unfortunately, Mr. James Cash Penney, who founded the company, didn't have a whole lot of choice over how his parents named him....though I'll admit that his middle and last name are both interesting. Here he is as a toddler:







don't agree with you at all mmarshall about anything in this thread, especially about nordstroms which is more like visiting a lexus dealer, compared with jc penney which is more uncle vinnie's used car lot. i love dillard's too if i *have* to shop in a dept store because there's always knowledgeable staff who can point me to or help me get what i'm looking for. finding good and available staff in stores like jc penney and (shudder) macy's is sometimes hardee than finding bigfoot.


Well, it's your prerogative, of course, to shop where you want, but that doesn't change the fact that, for me, I think Nordstrom is a waste of money. Not the only example, but two bathing suits I bought there (using a gift card my brother gave me) unraveled and tore away within six months (for health and exercise, I swim a lot....every morning, at an indoor pool). Even the ones I've bought from Wal-mart are better than that....not to mention the ones from J.C. Penney. And they are usually cheaper to boot.

Last edited by mmarshall; 12-13-18 at 01:24 PM.
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