JCPenney is in major restructuring mode this year and we can’t blame them--other mass retailers and department stores are constantly pushing new collaborations and retail concepts and Penney’s has always been a little stale by comparison.
In January, the company announced a slew of new measures, which included reorganizing the store layout to function more like shop-in-shops, with various collaborations with other labels--not unlike Target’s new concept. And they’ve just announced even more changes. But is it working? Not yet--yesterday, the company logged a $163 million loss for the first quarter of 2012, which is a bigger hit than executives and investors expected and probably not good considering their restructuring plan is supposed to set them back $800 million this year--especially when much of that restructuring is probably dependent on cash flow from investors.
However, the company is (or, at least trying to appear) confident that new strategies, including simplifying operations and designer collaborations with the likes of Marchesa (whoa), Betsey Johnson and William Rast (uh, what?) will turn things around quickly. They also said in a release that the “transformation is ahead of schedule,” whatever that means. According to WWD, retail analysts were mostly convinced by CEO Ron Johnson’s spiel at a presentation yesterday. Investors, it seems, were not as satisfied--as we were writing this, WWD alerted us that JCPenney’s stock went down 17.6 percent today. Yikes.
Other changes include: a new logo, different pricing structure, new hires, new categories (food & beverage?) and the aforementioned collabs with Georgina Chapman, Betsey Johnson and William Rast (we’re assuming that’s still Justin Timberlake and Trace Ayala). Oh, and a collab with Cosmopolitan.
And while we know everyone loves a good designer collab, we’re not so sure about some of theirs. For one, it’s a lot at once (JCP had already announced collabs with Nanette Lepore, Lulu Guinness, Vivienne Tam in January). Also, Betsey Johnson recently went bankrupt so we aren’t so sure about her selling power and William Rast...well...we barely knew that even still existed, to be honest. Isn’t Justin Timberlake doing some sort of home line now? Marchesa, on the other hand, will be interesting.
And that’s not all. According to a release we got today from the Retail Action Project, JCPenney sales associates are pissed because part of the company’s “simplification” plan involved eliminating sales commissions entirely--at the potential cost of customer service and employees’ ability to make a living.
Overall, it sounds like kind of a hot mess. We'll definitely keep you updated on how all of this unfolds.