Penney Feeling Good About Q4 Prospects – 6/13/09
Like many others, J.C. Penney did not have a good fourth quarter in 2008. It’s hoping for a better performance this year and CEO Myron “Mike” Ullman is feeling optimistic that new styles and affordable prices will help the chain succeed.
Like others, Penney has been reducing inventory to help it limit the number of markdowns it has to take to move merchandise.
Mr. Ullman believes Penney has benefited from its standalone stores located outside of shopping malls.
“Off-mall discount venues are tending to do better in this climate because people are shopping more for need and closer to home,” Mr. Ulllman told attendees at Reuters Global Retail Summit.
Discussion questions: Is J.C. Penney positioned better than most of its department and specialty store competitors to rebound by the fourth quarter of this year? Do you share Mike Ullman’s optimism about the Christmas selling season?
Penney is better positioned than most department stores, although that isn’t saying much. Ullman continues to update and enhance the assortments and update stores. The off-mall locations definitely help, but they still have mostly mall locations with many of those malls desperately hurting due to bankrupted tenants. I think Penney will continue to hobble for awhile longer. Back-to-school has traditionally been a strength of Penney so they should do reasonably well as some pent up demand gets satisfied. Christmas should also be fairly decent, but mostly due to the dreadful last-year numbers they are up against.
Mike Osorio, your Dare to be Contagious! ™ strategist
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