J C Penney Company Inc (NYSE:JCP) Gears Up To Grab Market Share From Weaker Competitors
J C Penney Company Inc (NYSE:JCP) has started making the right moves, aimed at bringing the struggling giant retailer back to its feet and getting it growing from there. The reforms that JC has started tossing under the new CEO, Marvin Ellison, are inspiring and should enable the company to grab market share from its weak competitors.
J C Penney Company Inc (NYSE:JCP) is trying to bring life back to its home business, which once used to be a key revenue contributor until former CEO, Ron Johnson spoiled the party. In efforts aimed at rebuilding the potentially lucrative home business, JCP recently sent out a voluminous home catalog that showcases an assortment of home offerings in the categories of furnishings and accessories.
Rebuilding the home business
By mailing catalogs, J C Penney Company Inc (NYSE:JCP) gets the chance to get back the home market it has lost to rivals. Although the home category used to rake in 24% of sales at JC, the department currently accounts for just about 8% of total sales. However, there are opportunities in rebuilding the home business.
The other strategy that JC is using to try to recapture its lost retail market share is implementation of specialty departments. In addition to The Foundry, the department that caters to big and tall men, JCP is pondering a large size women’s department.
With specialty departments, J C Penney Company Inc (NYSE:JCP) is able to increase focus on customer demand and also inspire customer loyalty. Strong customer loyalty provides JC with the opportunity to get the shoppers to spend more at its stores, thus boosting sales in adjacencies.
The other thing that JC’s new CEO needs to address is the unproductive stores. The management has the option to downsize underperforming departments or close stores that are unproductive. Such downsizing should cut costs and free up resources and attention to be focused on promising businesses.
Downsizing and e-commerce go hand in hand as closed physical stores are replaced by online stores.
With proper implementations, J C Penney Company Inc (NYSE:JCP) has a chance to get back to the $17 billion in sales that it once used to register.
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