retailer expects the struggle will continue through the end of the year
San Francisco, CA -- (SBWIRE) -- 10/08/2012 -- Despite changes in their pricing, merchandise and store design, J.C. Penney and Company is one of the biggest decliners on the stock market recently. The company also expects to continue to struggle through the second half of the year as well. The recent changes to the stores have turned many loyal shoppers away, resulting in financial turmoil for the company.
J.C. Penney says it “still expects business to improve in the long run.” The new store designs have gotten great reviews from many investors but others are not yet ready to make another investment with the retailer because of their recent track record. Shares of JCP plunged almost 11 percent to $25.99 on Thursday September 20. Analysts believe it is going to be a tough road for JCP in the coming months.
The company reported a net loss earlier in September for the “second-quarter of $147 million”, or 67 cents per share. This is a huge difference considering just a year ago the company recorded net profits of $14 million. The company has said that the decline has been in relation to the company’s shift in strategy since Ron Johnson took over as CEO. The new strategy for the company has included new product pricing, a revamp of stores and market push to try and revive a tarnished brand name. This has also included doing away with coupons and constant sales and moving toward “everyday low pricing.” This not only confused shoppers but upset them and the company responded by changing the new programs slightly.
The new store model which debuted in Plano, Texas and got rave reviews. The stores have many name brand products such as Disney, Liz Claiborne and Carter’s, which have been staples of the company as well as new labels such as Sephora and Levi’s. The store also offers self check out and wider aisles. Eventually the stores will also add coffee, candy and gelato stands to keep shoppers inside the stores. The retailer hopes that this will move the stores image to one of upscale and trendy while still remaining close to their value edge with consumers.
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