JCPenney Looking To Win Back Its Fashion Clientele

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Mar 09, 2015
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JCPenney (JCP, Financial) is switching out its warm and cozy winter wear with spring fashion, sandals and accessories coming up soon. The company is showcasing spring style in both new and beloved brands, while revealing an updated assortment of shoes, handbags and accessories that will tempt and seduce weary shoppers hunting down the season’s latest fashion trends.

Senior Vice President, Siiri Dougherty was quoted saying "This spring is about bold, colourful and compelling designs that inspire our customers. JCPenney merchant teams partner with our in-house design and trend teams to determine how these looks will come to life in our portfolio of private and exclusive brands."

Finding the look

One brand making a key style statement for women is Stylus. Along with other brands found only at JCPenney, like Liz Claiborne, Worthington, Arizona, St. John’s Bay and Decree will feature an all new spring set inspired by the following trends:

  • Femme & floral – lace, draped detailed floral print infused with soft yellows to create romantic statements.
  • Sporty & Chic – Athleisure turns sophisticated with modern athletic wear incorporating clean lines and stripes.
  • Bold & Graphic – Daring portrayals of rich citrus colours with traditional black and white are classic examples of art influenced fashion. Bold stripes and retro-detailed prints paired with classic silhouettes are essential to making this trend key.
  • Retro Boho – Characterized by Bohemian stylings, this trend will offer fashion that is flowy and functional with earthy tones accented by tribal-inspired patterns.

JCPenney will soon begin testing center core updates in certain stores this spring to promote greater cross shopping between jewelry, shoes and handbags. White modern fixtures will display the merchandize, complete with dedicated forms and stylish black lacquer mannequins to create a shiny display of necklaces, bracelets, earrings and scarves.

Analysts predict JCPenney will post $-1.48 earnings per share for the current fiscal year.

During JCPenney’s fourth quarter earnings conference call, CEO Myron E. Ullman mentioned the previous year had been great for the company with JCPenney growing 4.4% in the fourth quarter.

Shares of JCPenney opened at $7.88 on March 4. JCPenney has a 1 year low of $5.90 and a 1 year high of $11.30. The stock has a 50 day moving average of $7.90 and a 200 day moving average of $8.21 with a market cap of $2.403 billion. After soon announcing their earnings results on Feb. 26, JCPenney reported ($0.19) earnings per share for the quarter, missing the analysts’ consensus estimate of $0.74 by $0.93. The company had revenue of $3.89 billion for this quarter, compared to the estimate of $4.71 billion. During this same quarter last year, JCPenney posted $0.68 earnings per share and their revenue was recorded at being up 2.9% compared to the same quarter last year.

Forward, one stitch at a time

Looking ahead to 2015, JCPenney expects its sales to rise 3 to 5 percent at established locations. Under its previous CEO, the company had alienated its key customers and lost billions in revenue by getting rid of discounting and basic merchandise. Current CEO Mike Ullman is trying to help get the company back on track, focusing on online sales for the quarter. Online sales from jcpenney.com went up 12.5% from a year ago at $428 million.

Forecast

Analysts have switched their opinion on JCPenney from a sale to a hold. This is highly recommended as the company is in a transition phase trying to get back its share of the market share. One would be wise to stay bearish on JCPenney for the upcoming quarter to analyze its growth pattern for that time period and make a calculated call in the very near future depending on total revenue.