Free Haircuts Will Not Save JCPenney
According to several media sources, JCPenney Co. Inc. (NYSE: JCP) will extend its program for free children's haircuts. The original promotion, offered in August, brought in 1.6 million takers. The sinking retailer said it would renew the offer starting November 4. The free offer is only available on Sundays. If JCPenney wants to really boost its store traffic, which has had a sickening drop, it may want to extend the program so its is available every day.
JCPenney's attempts to regain customers have been based on smoke and mirrors since Ron Johnson joined as chief executive after a stint as head of retail at Apple Inc. (NASDAQ: AAPL). Johnson revamped merchandise pricing almost immediately after his appointment, which means he barely had time to analyze the company's old strategy. With the brand new CEO leading a heavily publicized presentation in January, JCPenney:
revealed its plans to become America's favorite store. In a presentation titled "In Praise of Fresh Air," Ron Johnson, the Company's chief executive officer, and Michael Francis, its president, detailed the initiatives that will transform the jcpenney shopping experience by fundamentally re-imagining every aspect of the Company's business and boldly pursuing change.
Sales at JCPenney dropped more than 20% in the first reported quarter after Johnson took over. Despite its lack of success, Johnson trumpeted the plan, with some modifications, again less than a month ago when the company released more bad earnings:
"We have now completed the first six months of our transformation and while business continues to be softer than anticipated, we are confident the transformation of jcpenney is on track. The transition from a highly promotional business model to one based on everyday value will take time and we will stay the course," said jcpenney CEO Ron Johnson. "This month we simplified our pricing, launched the first of our new shops, and accelerated our marketing efforts to focus on brands, products and value. Early response to these efforts has been very encouraging."
The quarterly numbers gave no support for the success of the "transformation."
The fact that Sundays-only free haircuts are considered a big deal at JCPenney is another sign of just how much the retailer is grasping at straws.
Douglas A. McIntyre
Filed under: 24/7 Wall St. Wire, Retail Tagged: AAPL, featured, JCP