JC Penny is the department store that ruled supreme during the 1960s and 1970s. But Sears may take offense to that statement. Sears was another retail powerhouse that consumers couldn’t stay away from for the last five decades. But Just like JC Penny, Sears is heading for that retail graveyard where old slogans and broken retail dreams go to rest.
JC Penny and Sears are dinosaurs in a retail environment that has no room for dinosaurs. Today’s retail environment isn’t your grandmother’s way to buy merchandise. Granny had to go to a JC Penny to buy a new dress or to find the right sofa for that remodeled basement that took years to finish. Today’s retail environment is a virtual extravaganza where one click of a mouse can deliver almost every item under the sun to your doorstep.
Brick and mortar retail establishments like JC Penny didn’t react to the Internet shopping craze fast enough. Not reacting fast enough in the retail business is the kiss of death. But JC Penny did try to become relevant when the board hired Marvin Ellison in 2015. Ellison is the man who put Home Depot on the list of top retail performs when he got the CEO job in 2003. Ellison spent 12 years at Home Depot before he decided to help JC Penny avoid disaster. But the Board of Directors at JC Penny didn’t understand what Ellison was trying to do when he put a push on selling appliances due to Sears selling off their appliance brand. Ellison also reversed the upmarket approach the former CEO of Penny launched unsuccessfully.
Mr. Ellison’s decisions did increase traffic in some stores. And sales stabilized thanks to an expanded private label collection and a Sephora push in more stores. But the retail giant is carrying too much debt, and the growth of Amazon is putting a real damper on their ability to be successful in the Internet retail market.
The chance of JC Penny surviving in this retail climate is slim, according to some retail analysts. Lowes, the home improvement store that tries to upstage Home Depot, is taking away JC Penny’s hope to survive. Lowes recently hired Marvin Ellison. And that move, according to the retail gods, could be the last straw for Dallas-based JC Penny.
JC Penny had a good retail run, but it’s time to pass the baton to another retail giant who understands how Millennials shop and what they want to buy.