JC Penney is one of America's best-known general retail groups, specialising in clothing, accessories and home furnishings but it has struggled for several years to reignite performance. Enforced closure during the Coronavirus pandemic proved the final nail in the chain's coffin, and Penney filed for bankruptcy in May 2020. An outline deal has been agreed for the chain to be jointly acquired by its two biggest landlords, the shopping mall owners Simon Property and Brookfield Property. The company first began to lose sales and market share in the 1990s as customers moved away to less traditional outlets, especially discounters such as Walmart. Penney's fought back with a marketing campaign designed to show that its department stores offer casual as well as conservative fashion at affordable prices. But the company also had to close several stores, and restructure others in order to regain profitability. Financial performance improved significantly between 2004 and 2007, before hitting a brick wall at the end of the decade as a result of the recession. Despite its best efforts, Penney's found it hard to shake off perceptions that it is a tired and slightly dowdy brand. A new management team led by former Apple Stores chief Ron Johnson launched an ambitious overhaul of JCP's strategy in 2012, but not only did the long-expected turnaround fail to materialise but in fact performance significantly worsened, leading to another management overhaul a year later. The group is still searching for a lasting fix. Jill Soltau was appointed as CEO in 2018, taking over from Marv Ellison. As of 2020, JCP had 846 stores across the US. Apparel and accessories account for almost 75% of sales. The group has a substantial portfolio of top-selling private label brands including Arizona Jeans, Worthington, St John's Bay, Decree and Okie Dokie. It acquired the Liz Claiborne fashion label as well as jewellery sideline Monet in 2012. Former football star Michael Strahan, now a top TV host, also has his own menswear line at the chain. Private label accounts for a little under half of revenues. Group sales for the year to Feb 2020 were $10.7bn, down by more than two-thirds in two decades. The company reported its ninth consecutive net loss, of $268m.
Capsule checked 10th September 2020
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Historical profile information for JC Penney
Adbrands Daily Update 10th Sep 2020: JC Penney has been saved from liquidation by its two biggest landlords, the shopping mall owners Simon Property and Brookfield Property. They have agreed to acquire the long-struggling business for $300m in cash plus $500m of assumed debt. That deal must still be approved by bankruptcy court but has the support of a group of Penney's creditors. Assuming it proceeds as planned, the store will retain 650 of its 850 stores. It is not the first time that Simon and Brookfield have teamed up to rescue bankrupt tenants in order to keep their shopping malls open. They also already own Aeropostale and Forever 21, while Simon part-owns Brooks Brothers and Lucky Brand Dungarees.
Adbrands Daily Update 18th May 2020: As had seemed inevitable for several weeks (if not much longer), JC Penney filed for Chapter 11 bankruptcy protection. It is the biggest victim to-date of the forced closure of retail outlets under the Coronavirus pandemic. The chain plans to close around 240 of its weakest outlets and has proposed spinning off its real estate holdings into a public trust, separate from the retail operations. With support of a majority of its lenders, it has secured funding to keep trading during the restructuring process. Several outlets reopened during May as lockdown restrictions eased in some states. CEO Jill Soltau said she hopes a slimmed-down Penney will emerge from "Chapter 11 and this pandemic as a stronger retailer."
Adbrands Daily Update 24th Apr 2020: JC Penney was already struggling before the Coronavirus pandemic, and enforced lockdown has provided the final nail in the coffin. The store was reported today to be in advanced talks with its lenders, who include three of America's biggest banks, for a managed bankruptcy filing. Penney's is likely to be followed by others. Neiman Marcus is also considering emergency options including sale or a bankruptcy filing. Gap, too, warned it will need to raise additional cash. It said it has already burned through half its available cash reserves, even after skipping April rent payments.
Adbrands Weekly Update 4th Oct 2018: Struggling retailer JC Penney finally named its new CEO after a five month search. Jill Soltau joins the company next week from fabric and crafts retailer JoAnn Stores. She steps into shoes vacated by Marv Ellison in May when he departed to lead home improvement giant Lowe's.
Adbrands Weekly Update 24th May 2018: Marv Ellison is to leave struggling retailer JC Penney next week to take over as head of Lowe's. Incumbent Robert Niblock is retiring after 25 years as CEO of America's second largest home improvement store. JC Penney has begun the search for a new CEO. In the mean time, it will be led by a four-person senior management team that includes CFO Jeff Davis and chief customer officer Joe McFarland.
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