Struggling JCPenney Spends $1 Billion in Last-Ditch Effort to Stay in Business
JCPenney has unveiled a grand plan to stay afloat in a constantly-evolving retail market that has in recent years put brick-and-mortar companies out of business on the brink or out of business.
As Americans’ spending trends have adjusted to the convenience of online shopping, the country’s once-strong department stores have been tested. Many have failed.
Sears is now operating just a handful of stores while Bed Bath & Beyond went out of business in July.
The retail chain Tuesday Morning met a similar fate this summer and is now just a memory for former shoppers.
JCPenney, which emerged from bankruptcy in November 2020 with new ownership, is making big investments in its stores as well as its online operations and its mobile app.
By spending $1 billion on making shopping more convenient, the 121-year-old company hopes to stick around for a while longer, if not indefinitely in a marketplace controlled by the likes of Amazon and Walmart.
According to the Associated Press, JCPenney will inject cash into its operations with plans for a revival scheduled to be completed by the end of 2025.
Company CEO Marc Rosen told the AP in an interview this past week the move is part of the company’s new strategy at going after middle-class shoppers and not necessarily the wealthy clientele the company targeted in years past.
“Now is the time more than ever to lean into that and make sure that we’re delivering that experience for our customer,” Rosen said.
What will the updated JCPenney locations look like?
According to Rosen, the department chain’s physical locations will be brighter while checkout stations will be consolidated to a single area of the stores for a more efficient experience.
Currently, registers are spread out across the large footprints of JCPenney’s locations.
Additionally, employees will be given mobile devices that they can use to better assist customers and manage their inventory.
Wi-Fi networks will also be available.
Rosen also said the company’s financial restructuring has put it in a position to compete with other retail giants.
JCPenney currently operates around 650 locations after it closed about 200 stores in recent years after it was acquired by Simon Property Group Inc. and Brookfield Property Partners LP.
The company’s debt was reduced from roughly $5 billion to around $500 million today, thanks to savvy leadership and calculated moves, such as a focus on revamping its beauty departments.
But the company still faces challenges, Rosen told the AP, as it is behind its competitors in regard to both convenience and aesthetics.
However, the company has already remodeled 100 locations and plans to remodel an additional 50 to 100 stores every year.
JCPenney reported sales of around $9 billion for 2022.
CORRECTION, Sept. 11, 2023: The name of retailer JCPenney was misspelled in an earlier headline for this article.
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