What should the new Penney CEO do first?

Here are a couple of related posts (from RetailWire) about the future of JCP. The first one notes the departure of CEO Marvin Ellison for Lowe’s, and the second post joins the debate about whether Penney can appeal to both Boomers and Millennials:

JCP continues to have a sales problem; its comp-store sales for 2017 and the first quarter of 2018 lagged its competitors and failed to take advantage of the continuing decline of Sears. Kohl’s experienced similar weather issues in Q1 but managed to deliver a 3.6% store-for-store sales increase.

It sounds like 20/20 hindsight, but Mr. Ellison operated in a comfort zone since joining Penney, based on his long background at Home Depot. (And now he is really moving back into that comfort zone.) The push toward home goods — especially major appliances — appears not to be the answer to Penney’s lackluster sales.

When Penney finds a suitable replacement, I expect the company to accelerate its store closure program — unless there is opportunity by heading in the opposite direction and picking up sites from Bon Ton, Sears and so forth. But Mr. Ellison’s strategic retreat (while Kohl’s pushed to maintain its store base as part of an omnichannel strategy) looks like a mistake from here.

And another post more focused on customer segmentation:

JCPenney has presented its investors (and consumers) with a false choice over the past several years, even predating the Ron Johnson era. Either “cater to our current core market of aging Baby Boomers” or “figure out how to attract Millennials.” Any store expecting to be sustainable in the long run needs to figure out how to do both.

It’s possible to carry robust assortments of both Liz Claiborne and brands targeted to younger shoppers, especially in women’s apparel. Without those younger consumers with increasing spending power to accompany their sheer numbers, the “old” JCP base will continue to shrink.

It will become clear that Marvin Ellison made a mistake shrinking the footprint of Penney’s “softlines” businesses in order to squeeze in major appliances and more furniture. In hindsight, JCP could have used this space to offer broader and deeper assortments of apparel and accessories targeted to both Millennials and their moms.

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