JC PENNY

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  • Topic: J. C. Penney Historic District, Rite Aid, J. C. Penney-Chicago Store
  • Pages : 2 (595 words )
  • Download(s) : 127
  • Published : November 25, 2013
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4. Impact
a. What has been the impact of their new strategy on their stock prices?
JC Penny has cost a lot of money to make its strategy work and the increasing costs of the company have let down their stock prices. The retailer reported a second-quarter loss of $147 million and sales slide 23% to $3 billion according to data compiled by Bloomberg. So the retailer and stores have been losing sales and consumers, so the losing on their profits has been letting down their stock prices as well. JCP also faces lower profit margins in the due to rising commodity costs which will increase its clothing costs. They spend a lot of money refreshing their stores and putting commercials on the TV to attract consumers, but that also add a lot of costs which let down their profits. Besides the increasing costs of the commercials and store development, there are also other costs which JCP has been heavily invested in its new top officials during its new strategy. JCP gave its four new executives a total of $134 million in stock grants and other rewards, which have also been letting down Penney’s stock price. At the beginning of their new strategy, it is normal that the stock price will be falling and that is what happened during May, June and July of 2012. But after their strategies have been on for a while, their stock price went up during August and September of this year. After September, Penny’s stock price started to fall down again during October and November. Overall, Penny’s stock price has fallen down 36.88% from 11/09/11 to 11/09/12. b. How should they proceed as a company based upon the response to their repositioning strategy? I think JC Penny should take their new strategy slowly and not too fast. They should do a test for their new strategy in limited and isolated markets before extending it across their whole channels. Making changes and new strategy is good, but overhaul it won’t make the strategy work as they wanted. There is some overhaul in response to...
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