J.C. Penney’s Myron Ullman: The Worst Is Behind Us
J.C. Penney (NYSE:JCP) finally had some good news to share on Wednesday. The struggling retailer released its earnings for the quarter ended February 1, and for the first time in more than two years posted a gain in profit along with a gain in same-store sales. J.C. Penney’s same-store sales rose 2 percent, the first gain since the quarter ending April 30, 2011, while its net income was $35 million, compared with a loss of $552 million in the year-ago quarter. The company’s last quarterly profit was in the quarter that ended July 2011. Revenue fell 2.6 percent to $3.78 billion.
J.C. Penney’s gains may seem paltry, but many analysts, along with CEO Myron Ullman, recognize that they that indicate J.C. Penney is finally moving in the right direction. The chief executive has said time and time again that the company is slowly orchestrating a full-out comeback, but it wasn’t until Wednesday that any advancements could be seen. According to Ad Age, Ullman now believes that the worst is behind J.C. Penney.
He told analysts during an earnings call this week, “The most challenging parts of the turnaround are behind us.” He also noted that J.C. Penney is preparing for the final phase of its turnaround and said that while the first two phases of its restructuring were important, as they involved stabilizing the brand and rebuilding, the third phase is also just as critical because it requires refining merchandising and marketing strategies in order to improve gross margins and sales.
J.C. Penney has committed to a series of strategies within the past few months in order to boost sales, especially during the lucrative holiday season, and the ones that seem to have benefitted it the most include its return to traditional discounting and the resurrection of popular private-label brands.
Former CEO Ron Johnson stepped away from such strategies during his reign over the retailer, believing that J.C. Penney should start stepping in different directions and away from traditional sales strategies. However, those decisions never seemed to pay off, and it was only when the company returned to its roots with Ullman that it started realizing success again.
Now, Ad Age reports that J.C. Penney is committed to winning back its once-loyal customers, and the company will work to do so in a number of ways, one of which includes six ads during the Academy Awards this weekend. The spots will feature the brand’s new tagline, “When it fits, you feel it,” and Ullman says that the commercials are designated to prove to customers that J.C. Penney is reverting back to its original promise of providing clothing that fits people’s needs and sizes.
A J.C. Penney spokeswoman said to Ad Age: “We had recently lost track of who we are and the wishes of the customers we serve. As we focus on reconnecting with our core customer, our new marketing marketing will remain true to our values and those of the customers that we serve. Through our new marketing we are bringing decades of relevance into a present proposition that matters, highlighting what have always been good at — fitting the diversity of America’s shapes, color and wallets.”
As Americans sit down on Sunday to watch the awards, they’ll see a newly profitable J.C. Penney hit the screen and hopefully consider supporting the retailer’s effort to maintain the progress in its turnaround.