It’s got to be one of the most unlikely rebound success stories of the past five years: JCPenney is back.
The rising vitality of the long-beleaguered traditional department store chain—which just a few years ago was heading off in the wrong direction and courting extinction—now is being noted by everyone from consumers to Wall Street analysts. And that is lifting both the appreciation of and prospects for the company as it continues to make progress under new CEO Marvin Ellison.
For example, here is a tidbit you probably never expected to read again: JCPenney led all US department stores in buzz and purchase consideration during August’s back-to-school season. YouGov BrandIndex data said JCPenney ranked No. 1 in its industry among parents with kids 18 and younger in those measures, beating out Kohl’s (while trailing non-department stores Walmart, Target and Old Navy overall).
Such radically improved sentiments among American shoppers have led JCPenney to same-store sales growth in seven of the last eight quarters, including its fourth-straight increase in the most recent quarter, and a return back up to the level of 87 million active customers.
And here’s something else that has been all too rare in the four years since former Apple retail chief Ron Johnson took the helm and almost ruined the company in less than two years: an upgrade and praise by a security analyst.
In boosting JCPenney to a “buy” from a “hold,” Deutsche Bank analyst Paul Trussell delivered implicit praise to former CEO Myron Ullman, who both preceded Johnson—and then came back to clean up after him.
“The company is already proficient in the art of retail under its seasoned merchandising team with what we think are the right brands and assortment,” Trussell wrote. Ellison “is now driving the next step of applying the science of retail to bring JCPenney up the curve.”
JCPenney pulled back from the brink of ruin because Ullman reversed most of the radical overhaul Johnson had instituted in his effort to create a retailer for the new era. Ullman re-instituted the promotion-driven business model that historically had served the retailer and brought back a larger penetration of private-label brands that long have driven JCPenney’s sales.
“Now,” Trussell wrote, “the goal is to get [customers] to increase their visits, and how much they spend.” Boosting that goal will be ramping up JCPenney’s store-within-a-store partnership with Sephora, adding new fixtures and lighting in major departments such as handbags, and increasing space for women’s footwear.
There’s more, but you get the idea: JCPenney is back for sure—and probably for good.