Key Takeaways

• JCPenney was founded by James Cash Penney in 1902. According to its website, it claims to be “one of the nation’s largest retailers of apparel, home, jewelry, and beauty merchandise.” It has over 650 stores across the US and Puerto Rico.
• In an interview with the National Retail Federation in May 2022, JCPenney’s VP of Marketing, Bill Cunningham stated that, in the coming months, the company is planning on building technology designed to improve the customer experience across the board, including enhancing in-store and online shopping experiences. Additionally, it is looking forward to upgrading its supply chains.
• Commenting on the hires of Sharmeelee Bala and Katie Mullen, JCPenney’s CEO, Marc Rosen, states’ “With a strong balance sheet and unique products and services backed by our iconic American brand, JCPenney is a destination for best-in-class talent like Sharmeelee and Katie. Sharmeelee and Katie will be invaluable partners as we move forward with our digital journey and transform the business through technology and innovation.”

Introduction

Overview of Company

• JCPenney was founded by James Cash Penney in 1902. According to its website, it claims to be “one of the nation’s largest retailers of apparel, home, jewelry, and beauty merchandise.” It has over 650 stores across the US and Puerto Rico.

• Its portfolio of products entails brands such as Liz Claiborne, Worthington, and Stafford, and the website claims that these brands are so popular that “customers don’t realize they are exclusive to JCPenney!”

• According to Fortune Magazine, JCPenney’s estimated revenue for the fiscal year that ended in January 2020 is said to be about $11.17 billion. Statista, on the other hand, posits that JCPenney's retail sales for 2020 were about $7.48 billion. A 2019 Form 10-K submitted to the Internal Revenue Service (IRS) records that its 2019 revenue was about $10.71 billion. The research team could not find any recent revenue figures since the company was bought and became a private company in 2020.

 

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• According to data by Crunchbase, a business intelligence platform, JCPenney received a total of $1.5 billion in Funding in December 2020. The funding is believed to have come from Wells Fargo Home Mortgage and Crunchbase notes that this round of funding was post-IPO debt.

Mission and Values

• According to its website, JCPenney’s golden rule was to “treat others as we would like to be treated”, and this, JCPenney believes, set the momentum of the company’s ethos for the last 119 years of its existence. “The name of our stores has evolved, but our focus on putting customers and associates at the heart of what we do remains unchanged,” claims the website.

• James Cash Penney, the founder, is credited for the company’s values which include service, honor, courage, and cooperation. It prides itself on its rich legacy and history, as well as its impact on the communities they operate in. A statement from the website reads, “JCPenney has a legacy of developing strong, vibrant communities. With a commitment to helping close the opportunity gap, we are passionate about providing students in under-resourced communities the tools for success. We connect Company, community, and cause by investing our time and resources in three primary impact areas: professional clothing needs, youth programming, and career readiness support. Through the volunteer spirit of our associates and strategic investment in the work of our nonprofit partners, JCPenney and the JCPenney Communities Foundation are working to improve the communities where we live and work.”

• Additionally, the company believes in inclusion and diversity, which is witnessed in its workforce, suppliers, and vendors. To further entrench this within the company, JCPenney notes that it has invested in “education, accountability, and investment to inspire our customers, cultivate confident leaders, innovate through strategic partnerships, and serve our communities.”

• Further on supplier diversity, JCPenney claims to be a founding member of the National Minority Supplier Development Council (NMSDC) and the Women’s Business Enterprise National Council (WBENC).

Strategic Initiatives

• In an interview with the National Retail Federation in May 2022, JCPenney’s VP of Marketing, Bill Cunningham stated that, in the coming months, the company is planning on building technology designed to improve the customer experience across the board, including enhancing in-store and online shopping experiences. Additionally, it is looking forward to upgrading its supply chains.

• Cunningham remarks, “JCPenney is committed to adapting to the shopping habits and desires of our customers. From buy online, and pick up in-store to curbside pickup and the introduction of DoorDash same-day delivery, we’re serving customers by enabling their preferred mode of shopping.”

• As proof of its “improved digital and fulfillment capabilities”, JCPenney launched JCPenney Beauty, its “fully inclusive beauty experience”, in 2021. This new initiative is geared towards regaining old customers and increasing its market share, the press release reports.

 

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• Other strategic initiatives available in the public domain include JCPenney’s recent talent acquisition within its management ranks. In October 2021, JCPenney announced that Marc Rosen (pictured below), Levi Strauss’ former President, would be joining the company as the new CEO, bringing with him over “25 years of retail and e-commerce experience to the role.” At Levi Strauss, he championed Levi’s e-commerce business, bringing about “transformational growth.” The same strategy can be seen in the employment of John Aylward as chief marketing officer (CMO), Katie Mullen as chief digital and transformation officer (CDO), and Sharmeelee Bala as chief information officer (CIO). Bala, for example, is tasked with “ the development of solutions to unite JCPenney’s physical assets with its evolving digital footprint.”

 

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• Retail Wire, an online publication dedicated to the retail industry, reports, “Marc Rosen is pulling together a leadership team at JCPenney with a vision of doing nothing less than transforming the legacy retailer. Mr. Rosen’s ability to attract top talent is seen as one of the keys to restoring Penney from a retailer simply seeking to survive to one that thrives.”

CEO Quotes

• Commenting on the hires of Sharmeelee Bala and Katie Mullen, JCPenney’s CEO, Marc Rosen, states’ “With a strong balance sheet and unique products and services backed by our iconic American brand, JCPenney is a destination for best-in-class talent like Sharmeelee and Katie. Sharmeelee and Katie will be invaluable partners as we move forward with our digital journey and transform the business through technology and innovation.”

• John Alyward, JCPenney’s CMO, is slated to enhance the company’s omnichannel strategy to “deliver a modern seamless experience across stores and digital.” Marc Rosen is captured stating, “The 120-year-old JCPenney brand is iconic. We must protect what the brand represents while evolving how it expresses who we are today. John will help fulfill our potential at this pivotal moment when JCPenney stands alone as a one-stop retailer. Additionally, John’s passion for purpose-driven work will be an important asset as we continue to provide offerings that promote inclusivity and celebrate the diversity of our customers.”

Overview of Digital Strategy

• According to online publications Retail Customer Experience, Retail Dive, and Retail Touchpoints, JCPenney’s recent executive team hires represent the company’s seriousness in developing a winning digital strategy. Retail Dive, for example, states that new CEO Marc Rosen’s e-commerce experience is “an asset for JCPenney’s turnaround strategy.” Retail Touchpoints further elucidates, “Rosen’s digital credentials — he drove digital strategy at Levi Strauss & Co after holding a number of roles at Walmart, including SVP of Global Ecommerce — were a strong signal that JCPenney would emphasize e-commerce as it works to rebound from a pandemic-forced bankruptcy, and these new appointments bolster that assumption.”

• Both Retail Customer Experience and Retail Touchpoints agree that the hiring of Sharmelee Bala and Katie Mullen, as CIO and CDO respectively, is a move to improve JCPenney’s digital strategy.

• JCPenney’s 2019 Form 10-K alludes to the company’s challenge with its e-commerce and omnichannel approach. The report, in part, reads, “As our omnichannel strategy, which includes our stores, our website at jcp.com, or our JCPenney mobile app, continues to mature, it is increasingly difficult to distinguish between a store sale and an eCommerce sale. Because we no longer have a clear distinction between store sales and eCommerce sales, we do not separately report eCommerce sales.”

JCPenney’s Marketing Tech Stack

• According to Slintel, JCPenney utilizes at least 6 marketing technologies, ranging from customer communication platforms to e-commerce solutions. These include:
•  Intercom- a customer communication platform.
• Branch Metrics- a service that helps mobile apps “grow with deep links that power referral systems.”
• Ecwid- this is an e-commerce service offering shopping cart solutions 
• Manhattan Associates Enterprise Order Management- This is a central customer transaction repository “that provides a 360 view” of all customer orders, both in-store and online.
• IBM Sterling Commerce- an e-commerce solutions provider, including solutions such as connectivity and integration. 

•  SimilarWeb claims that JCPenney utilizes at least 32 advertising and 3 e-commerce technologies for JCPenney but requires registration or a paid account to access more intricate details.

• A press release about JCPenney Beauty notes that the company partnered with Thirteen Lune, an e-commerce solution described as “a revolutionary beauty and wellness e-commerce platform designed to inspire the discovery of beauty brands created by Black and Brown founders that resonate with people of all backgrounds.”

Challenges

Bankruptcy and The COVID-19 Pandemic

• CNN News reports that JCPenney filed for bankruptcy in May 2020, citing adverse challenges precipitated by the COVID-19 pandemic as the root cause. Fashion United later reports that the company emerged from the Chapter 11 filing in December of the same year when they were purchased by Simon Property Group and Brookfield Asset Management, Inc.

• In an interview with National Retail Federation, Bill Cunningham, VP of Marketing, admitted that the company had to shut down 250 locations due to the pandemic.

Sephora Moves Its Business to Kohl’s

• Forbes reports that in 2020, Sephora cut ties with JCPenney, with the beauty retailer opting to partner with Kohl’s in 2021 where it opened 100 stores. Forbes remarks, “One of the biggest surprises is that Sephora, which had their own stores as well as stores in most of JCPenney stores, will open 100 stores in Kohl’s next year with the intention of opening many more the following year. That’s quite a slap in JCPenney’s face. It has now lost the exclusivity of featuring the brand it once enjoyed.”

• My RGV, an online publication, notes that Sephora’s exit left JCPenney without a “major beauty presence.”

Major Competitors

Kohl’s

• Kohl’s describes itself as a “leading omnichannel retailer”, boasting of more than 1,100 stores across 49 states.

• Statista pegs its 2020 retail sales at $15.33 billion.

• A link to its website can be found here.

 

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Macy’s Inc

• Macy’s claims to be one of the world’s largest retail e-commerce businesses. It is headquartered in New York and has a “nationwide footprint.” It is home to brands like Macy’s, Bloomingdale’s, and Bluemercury.

• In 2021, the company achieved net sales of approximately $8.7 billion.

• A link to its website can be found here.

Gap Inc.

• According to a profile on CNN News, Gap Inc. “operates as a global apparel retail company, which offers clothing, apparel, accessories, and personal care products for men, women, and children.” Some of the company’s flagship brands include Old Navy Global, Athleta, and Banana Republic Global, among others.

• The company reported net sales revenues of $16.7 billion in 2021. In 2020, Statista records that it brought in retail sales amounting to $11.51 billion. 

• A link to its website can be found here.

Nordstrom

• Nordstrom prides itself as a leading fashion retail company “offering compelling clothing, shoes, and accessories for men, women, and kids”. It was founded in 1901.

 

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• Statista reports that the company’s worldwide net sales amounted to $14.4 billion in 2021.

• A link to its website can be found here.

Additional Relevant Facts

• JCPenney’s VP of marketing, Bill Cunningham states that while the company’s target customer is the quintessential “hard-working” American family, who range from 35 to 55 years, its core client is “more complicated than a single person.” He explains, “Sometimes JCPenney is labeled as a store for older customers, but we’re much more diverse than that. The household income of our core customer looks similar to the mid-American household income range. So, our core customer looks like the diverse make-up of America.”

• Forbes also notes that bankruptcy was a sort of blessing in disguise for the retailer, as it availed an opportunity for JCPenney to become part of the Authentic Brands Group (AGB). ABG is said to own some well-known brands such as Nine West, Aeropostale, Sports Illustrated, Forever 21, and Nautica, just to mention a few. The article continues to say, “It is an impressive list that ABG put together. Some of their brands will certainly help the future of JCPenney with some great merchandise, exclusive brands, and growth.”

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