Following the release of its dismal second-quarter financial results, J.C. Penney CEO Ron Johnson had one piece of somewhat-good news to share with financial analysts: Its sales are still dramatically down, but less so.

After launching its new ad campaign, its sales are now up 2 percent over the spring, Johnson said—although, during the spring, sales declined over 20 percent.

“For the first ten days with our new marketing, our traffic is down 7 percent to last year, which is a dramatic improvement, and our sales are running about 2 percent better than they ran over the spring period,” he said on a conference call following the results’ release. “Now, is that where we want to be long-term? No. But remember, during these kinds of periods during the spring we ran down over 30 percent. So, clearly our new marketing, our new message is getting through, we have more traffic in the stores, people are buying more, and we’re encouraged by that.”

Still, Johnson cautioned that the retailer’s numbers will likely remain dismal for 2012, though it hoped to “resume growth” next year. 

“We said this year would be a tough year,” he said. “Somehow I don’t think that message got through.” 

Other news from the conference call:

– Johnson plans to stick to his road-map. “We are going to create a new category that we call the specialty department store,” he said. “We think it’s going to be profound.” 

– Despite earlier assertions, the new J.C. Penney will still retain some cash registers, though they their numbers will be reduced.

“We do about 25 percent to 35 percent, it varies by store, in cash,” Johnson said. “Now, as we transition away from the checkout, we won’t overnight just eliminate it … Right now, we have 11 centralized checkouts. [After the transition,] there will be four of those in the store.” 

– In place of cash registers, Johnson will introduce his “square” concept, which will feature events designed to drive traffic, like Santa Claus, kid’s haircuts, and even yoga and Pilates lessons. There will also be a main “street” throughout the store, which will give shoppers places to relax and refresh. 

Rob Bates

JCK News Director