JCPenney, RadioShack facing not-so-happy holidays

The holiday shopping season seems to be looking up for retail as a whole, but there are some stragglers that could find the most wonderful time of the year difficult to capitalize on, among them JCPenney (NYSE:JCP) and RadioShack (NYSE:RSH).

The former's struggles under ex-CEO Ron Johnson are well documented, and despite the progress made since Mike Ullman's return as CEO, it looks like the retailer isn't out of the woods just yet. During its first analyst day in three years on Wednesday, JCPenney announced it was lowering its same-store sales forecast for the third quarter, which doesn't bode well for a continued turnaround.

It also means the retailer will be challenged to stay competitive in what's shaping up to be a particularly cut-throat holiday shopping season.

"I think, we're very disciplined about our promotional strategy," Ullman told analysts Wednesday. "Particularly, going back into the promotional cadence that we knew the customer valued…so we're not going to do anything that jeopardizes our gross margin."

RadioShack, on the other hand, announced a deal last week intended to stave off bankruptcy at least through the holiday season. New York hedge fund Standard General has replaced GE Capital as the tech chain's primary financer, putting $120 million in liquidity at its disposal.

That should see RadioShack safely to the new year, but Wedbush Securities Managing Director Michael Pachter suggested that it's profit or bust for the retailer this holiday. And despite its big rebranding effort, customers still haven't come to terms with the idea of a new RadioShack.

"If you go into the remodeled [stores], the product assortment is good, but nobody knows about it," Pachter told CNBC. "We all think RadioShack is the same as it's always been."

The good news (for everyone else) is that JCPenney and RadioShack look to be the outliers. While recent PwC research found that most shoppers expect their spending to be the same or decrease this year compared to last year, the National Retail Federation and Deloitte have both projected holiday sales increases in the neighborhood of 4 percent.  

For more:
-See this CNBC story
-See this Bloomberg story
-See this New York Times story

Related stories:
70% of shoppers would leave a work meeting to get limited-time offer
62% of shoppers want to chat with brands via mobile
Spending on consumer electronics up 2.5% this holiday season
Retailers' mobile platforms not holiday ready
RadioShack headed for Chapter 11?

Suggested Articles

Costco changes up its menu items, and Alibaba and Guess partner for a physical store.

Janey Whiteside, Walmart's new chief customer officer, is well acquainted with the importance of customer service in modern retail.

Whole Foods will offer deals on Amazon's Prime Day, and tariffs against China are causing pricing hikes.