Saturday, February 24, 2018
Business

JCPenney struggles go back to the human drive to get a deal

Gary Allenbaugh, manager of the JCPenney at Westfield Citrus Park, says all this hand wringing over the struggles of the department store chain really boils down to basic human nature.

JCPenney shoppers want a deal or at least the perception of one.

He brings up his wife as proof. What's the first thing she says when she comes home from a shopping trip? "Look at how much I saved!'' She never says, "Look at what I bought at regular price.''

It's a point that ousted CEO Ron Johnson obviously overlooked when he ditched coupons and sales in favor of "fair and square'' everyday pricing. The former wonder boy at Apple and Target said shoppers needed to be weaned off coupons and re-educated about pricing strategies. He went so far as to compare coupons to drugs!

People responded, all right, but hardly in the way he imagined. Shoppers like me never paid attention to the new promotions and weren't wowed by the low prices. Without the coupon incentives and doorbuster sales, we forgot about the place and just stopped going. By the time Johnson got the boot on April 8, sales had sunk 25 percent, and the stock had fallen by half.

Allenbaugh saw the challenges first hand and did his best to change customers' minds. It wasn't easy. He gives this example. When the store acquired the Liz Claiborne line from Macy's a few years ago, it reduced a $90 dress to $70. Using coupons and discounts, most shoppers got it for about $40. Then Penneys rolled out the everyday low prices, and the dress became $35.

Allenbaugh would explain all this to customers, but they would still gripe about not having a coupon. Many left in a harumph and haven't been back since.

A 35-year Penneys veteran, Allenbaugh is encouraged by news that the chain plans to revive its sales and coupon advertising, even if it means raising regular prices on most items. Like most employees, he wonders if the return of CEO Mike Ullman, who was shown the door to bring in Johnson, can really turn things around for the 111-year-old chain. Overall, Allenbaugh likes the changes and is optimistic about Penney's future.

In the meantime, he has big projects to tackle. His store is nearing completion on a total makeover of the home department, which at about 19,200 square feet has more selling space than many other retail stores. Gone are the dingy tile floors and shelves stacked tight with bed sheets, blenders and baking pans. In are polished concrete floors, chandeliers and home collections by designers Michael Graves, Martha Stewart and Jonathan Adler. For the first time, the store will sell mattresses and furniture — big ticket items.

Under normal circumstances, the new department would be a game changer, Allenbaugh said. Sections have the feel of an exclusive, boutique rather than a big-box warehouse. Accessories paired by color and theme look like what you see at Target, only prettier and without traditional aisles. One weekend a month, the staff will give cooking demonstrations using the store's pots and pans.

But with so much uncertainty looming for the chain, no one knows what the impact will be. The new home section was one of Johnson's initiatives and was too far along to be stopped after he left. The costly upgrades extend to stores nationwide and cover hundreds of thousands of square feet.

So far, some of Johnson's other ideas have shown positive signs. The mini designer apparel shops are doing well, although having separate sections makes it a bit tricky to find specific items. Joe Fresh, Lulu Guinness and other brands are attracting new shoppers. Stores carrying Sephora makeup have seen an uptick in sales.

I suspect a lot of people who jumped ship will be pleasantly surprised when they return. The stores look better, and the merchandise is more current yet still affordable. A few coupons could go a long ways toward winning back customers and keeping the chain alive.

Susan Thurston can be reached at [email protected] or (813) 225-3110.

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