Is it too late to save J.C. Penney?

(MoneyWatch) J.C. Penney (JCP) was on a downward spiral well before it hired Ron Johnson as CEO. And the now-former CEO's many mistakes didn't help the situation. But even if he had done everything right, the retailer would have had a tough time surviving.

Penney's same-store sales were already negative when Johnson was hired in November 2011. This was because the retail chain had little-to-no brand identity. Shoppers who remembered it at all from its heyday thought of it as a boring, down-market version of Sears (SHLD), another venerable retailer facing big financial problems.

In order to change this perception, Johnson, who was a top executive at Apple (AAPL) and Target (TGT), tried re-inventing the brand over and over and over again. First he got rid of sales in favor of every-day-low prices. The Plano, Texas-based company marked down all of its merchandise by at least 40 percent and played up that shoppers don't have to wait for a sale to get the best deal. Many observers questioned the wisdom of doing this at a time when the economy was still struggling. In addition, that meant Penney was now going after a segment of the market owned by Walmart (WMT), the most successful retailer in the world.

Johnson then brought back the sales and tried to do for Penney what he did at Target, transforming it by partnering with upscale designers that made it chic to be cheap. He added brands like the Mary-Kate and Ashley Olsen teen clothing collection. He also created "stores within a store," giving brands like Joe Fresh their own dedicated retail spaces. While there may be no worse idea in retail than going head-to-head with Walmart, doing that with Target would have to rank as a close second.

Penney's sales plummeted, dropping 27 percent in the third quarter of last year and another 28 percent in the fourth quarter.

It can hardly be a reassuring sign for investors and employees that Penney's new interim CEO is Myron Ullman, the man Johnson replaced. Ullman is a known quantity to investors and in the past it has not been a quantity they have cared for. When it was announced in June 2011 that Johnson was taking over from Ullman, the company's stock shot up 17.5 percent in one day.

So what can Ullman -- or anyone -- do now?

Unless the sales decline can be turned around very, very quickly -- by the end of the summer, according to some analysts -- the company may only have two options selling itself whole or in pieces. Given the condition of sales and the value of the J.C. Penney brand, there is a very real question about why someone would want to buy it.

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    Constantine von Hoffman is a freelance writer and writing coach. His work has appeared in outlets such as Harvard Business Review, NPR, Sierra magazine, Brandweek, CIO, The Boston Herald, TheStreet.com, CSO, and Boston Magazine.

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