J.C. Penney tries to freshen up with 'Joe Fresh'
J.C. Penney seriously needs to catch a break right now. Shoppers were scared off when the chain eliminated big sales in favor of everyday low prices. Now, Penney's will open 681 'Joe Fresh' shops inside their main stores.
J.C. Penney needs something to change its momentum. More than a year ago, the retail giant dropped sales and coupons in exchange for everyday low pricing. Since then, it has lost $1 billion and laid off 20,000 workers.
"They've lost 30 percent of their business. It's just gone away," says Ed Fox, a marketing professor at Southern Methodist University who tracks J.C. Penney. "That's an incredible hurdle for a retailer to try to clear."
He says Joe Fresh has sold well for Penney online and may work in stores. But by the time Penney fully implements its store-in-a-store plan, it may be too late.
Gabriella Santaniello, a retail analyst at Wedbush Securities, says Penney needs the fashion-conscious customer it's targeting because it has left its middle and lower income core out to dry.
"While they're trying to court a younger consumer, a hipper consumer, they're forgetting this moderate customer, Santaniello says. "They've brought in these hip cool brands which, at the end of the day, the consumer who has been shopping J.C. Penney is not really going to identify with."
Santaniello and Fox say that leaves the chain in a sort of no man's land, with confused customers who don't know who J.C. Penney is anymore.