JCPenney (NYSE:JCP) is discovering that its self-inflicted damage—from killing its coupons and promotions—may not be permanent. Cleveland Research financial analyst Jeff Stinson issued a research note to clients on Monday (May 13) that chain is now enjoying a "significant" increase in sales and traffic, due to the return of those sales and backed by large ad campaigns, Bloomberg reports.
Wall Street seemed to embrace the report, sending JCP up almost 3 percent to close at $18.24.
The reality is that shoppers have short memories and are as unlikely to carry a grudge as they are to care about who holds the CEO title on a given day. What disgruntled shoppers will do, however, is leave when they are upset and be more hesitant to return. But unlike the deep troubles that faced Borders and that continue to face Barnes & Noble and Blockbuster, what JCPenney is selling is still of strong interest and the shopper problem was whether with merchandise quality or variety as much as price. Given that they've fixed the price and still have enough dollars to shout about it, this kind of improvement is expected and realistic. (Even Best Buy is starting to dig itself out of its hole, so that's a hopeful sign for every troubled chain.)
JCPenney's challenge now is to breathe excitement back into the brand, starting with boosting employee morale. And Wall Street smiling and revenue inching upward is a pretty good place to start.
- See this Bloomberg story
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