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What ails JC Penny..?

September 07, 2013 (United States Of America)

Over the last five years, J C Penny has been continuously witnessing depressing sales performance. The total net sales of the company in 2008 was USD 18.48 billion, which fell to USD 12.98 billion in 2012. In comparison with year 2011, sales in 2012 have reduced by 25%.
 
The J C Penny Board recently brought back former CEO Mike Ullman, who has reintroduced some strategies and is bringing back key merchandise under store names like St. John's Bay. 
 
J C Penny tried to rebound its fortunes under a revolutionary plan implemented by former CEO Ron Johnson, which too failed. Johnson was ousted in April after 17 months on the job. 
 
J  C Penney Company, based in USA is one of the largest apparel and home furnishing retailers in the world. The company was established by James Cash Penny in 1902 and has grown to become a major retailer operating through 1,104 stores with a total 111.6 million square feet of space. 
 
J C Penny has registered a loss of USD 985 million in 2012. This is the second consecutive year of losses from continuing operations. For the second quarter of 2013, J C Penny reported net sales of $2.66 billion compared to $3.02 billion in the fiscal second quarter of 2012. 
 
Comparable store sales declined by 11.9% in the quarter, and were negatively impacted by the failure of prior merchandising and promotional strategies, which resulted in unusually high markdowns and clearance levels in the second quarter, a company release said. For the second quarter of FY 2013, the Company incurred a net loss of $586 million. 
 
In addition, the lengthy renovation and disappointing re-merchandising of its home department sections adversely impacted the Company's comparable store sales during the second quarter. 
 
The other indicators of performance are all showing consistent diminishing performance. Sales per gross square foot in 2011 were USD 154, which has come down to USD 116 in 2012. There has been lot of upheaval at the top & senior management at J.C. Penny over the last 30 months. 
 
J C Penny has a diversified supplier base of both domestic & foreign suppliers. There are over 2500 domestic & foreign suppliers who have been doing business with JCP since many years. Company, through its international purchasing subsidiary, maintains buying & quality assurance offices in 12 foreign countries outside USA. 
 
J C Penny with its consolidated subsidiaries employs approximately 116,000 people. It outsources various information technology functions to third party service providers.
 
 

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