I have to wonder if any of the investors that have bought into JCP set foot in the stores or ever shopped there. I'm leaning towards no. Johnsons idea of setting up the stores is an epic fail as well as I don't believe it was completed. So your left with a recipe for disaster. My girlfriend recently did a walk through of the Roosevelt field location as part of a marketing study for Hofstra. The results were dismal.
Upon entering the store you see three well dressed, all-American looking mannequins lined up single file. This overall neat, streamline look continues throughout the store. The store layout, brainchild of former CEO Ron Johnson, is set up in sections. Each section is a boutique-like box which showcases a certain designer (eg. Martha Stewart Living) or type of apparel (eg. Women's Swimwear). It is easy to locate your size, as everything is neat and tidy. The reason for this neatness lies not in attentive employees (because there are few), but in a lack of customer traffic. The store is practically desolate and the merchandise is unimpressive with equally unimpressive pricing.
A main problem of JCP is a lack of employees. Upon entering the store, I did not see any employees and when I did find them they were not very helpful or enthusiastic. They walked right by me without a word. For a store that is struggling, one would think that the employees would have better training in order to revamp the store image. I was not approached or greeted once by a single employee, not even by a man who appeared to be a manager who walked right by me.
Compared to other mid-tier department stores like Macy's, the store experience is not very different. Employees are equally unhelpful in Macy's, but to their defense, Macy's has much higher store traffic. In conclusion, I would give J.C. Penney a letter grade of C-. Their store experience is below average due to their cheap-looking merchandise and uninspiring store layout and employees. Next time I need to venture into a department store, I am surely going to avoid J.C. Penney's.
I would also like to note that the checkout experience should you desire to purchase something would be a chore. Due to the lack of trained help one can not easily enjoy shopping or finding a dressing room. The store is huge. The registers are located on the walls almost 50 yards from you. It's like the apple store on steroids with no customers. The idea of walking through to the end where you complete your purchase works well in a smaller layout flooded with knowledgeable employees but at JC Penny there is no direction whatsoever. The register seems miles away and you find yourself floating in a surreal world surrounded by unimpressive merchandise. The only thing missing are the inevitable cobwebs.
J.C. Penny faces a tremendous challenge. They don't know who there competition is. Is it Macys, or nordstrom? Is it sears, or target? Wall mart? Kohls? I don't believe they can compete effectively the way they are situated. People are very set in there ways and the days of going to JC Penny for a day of shopping are long gone. They need to seriously re-evaluate what's going on. Perhaps consider rebranding. Moving to smaller locations and becoming a stand alone store. Placing themselves in an environment where success is achievable. Playing the music in the stores a little louder. Offering better products. Becoming a dollar store? No.. Maybe a clearance section. More registers in the store. People that care working for them. A sense of urgency. A sense of enjoyment. How can they separate themselves?
Customer Service!! Real big. They seem lost and you feel it when you walk through the store. It's a sad experience and the time they have to fix it is dwindling away in the wind. They need to re-establish themselves in a flooded market. I wish them the best of luck.
Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.