There comes a point in a retailer’s life when it is simply no longer relevant. Best Buy still gets foot traffic, and some of those visitors actually do buy while in the store (after checking the prices of competitors on their phone, of course).
But JCPenney (NYSE:JCP)? Not so much.
As I wrote in a recent post, JCPenney is toast. The company is a “tweener,” squeezed between Walmart and Target (NYSE:TGT) on the low end and Dillard’s (NYSE:DDS) and Macy’s (NYSE:M) at the mid-range price point. Not to mention it also face deep discounters such as Ross Stores (NASDAQ:ROST) or, again, online retailers like Amazon.
There is no compelling reason to go to a JCPenney store, and it shows in the company’s results. Revenues have been stagnant for years; they actually fell by 26% last quarter as the company tries to get CEO Ron Johnson’s turnaround plan into gear. Earnings are firmly in the red and have been for the past four consecutive quarters.
In a weak overall economy, I do not see a future for a marginal retailer like JCPenney. Outright bankruptcy might still be a few years away, but I see no recovery for a store that has already fallen so far in relevance to shoppers. I challenge you to name a single friend or family member who has shopped there in the past 12 months.