It’s been a long, tough road—mostly downhill— for J.C. Penney since former Apple retail chief Ron Johnson took over the helm in January 2012. CEO Johnson was expected to work the same magic for the tired clothing retailer as he had for Apple’s stores, which see some 17 times more sales than the national retail average.
Alas, it hasn’t gone that well at J.C. Penney. At its Q3 earnings call this morning, it was revealed that the company suffered a loss of $203 million.
Johnson’s quest to take J.C. Penney stores into profitability so far hasn’t worked out. And if the CEO’s comments to investors and analysts this morning are any indication, there’s not much reason for optimism. “I am sure many of you are wondering how we’re going to make it through the next eight weeks,” he said, referring to fears about how well the company will fare during the holiday season.
He then talked about his so-far failed strategy to transform the stores, saying that customers dislike what the old J.C. Penney has become, but are upbeat about the new stores that feature a cafe and lounge area, and technology, like iPads and mobile checkout systems. “I’m really leading two companies. One is J.C. Penney, a promotion department store. The other is JCP, a specialty department store,” said Johnson. “What’s going to be good for one is not going to be good for another.”
Granted, Johnson was also upbeat, saying he expected 2013 to be the comeback year. But whether the CEO had a weak moment during the call, or was looking to be transparent to important stakeholders, those negative comments were a downer—so down that the stock dropped as much as 10% during the day. The lesson: Even in tough times, show some optimism.
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