J.C. Penney executives are warning that the company’s dramatic sales slump will continue through the first year of its “transformation.”
In a Sept. 19 presentation following the unveiling of a prototype store filled with the company’s new “shops,” CEO Ron Johnson told analysts he expects the back half of the year to follow the first half, which saw slumping sales and profits.
But he added that the company’s new Levi’s boutique—part of an envisioned string of in-store shops, for companies such as Disney—is outperforming the rest of the store by 20 percent.
He also clarified comments about eliminating cash registers, saying employees will be armed with iPods to help customers check out electronically, though some registers will remain. “It won’t be like there will be no checkouts,” he said.
He said that customers who toured the new prototype store had a positive reaction, and said it turned around their perception of J.C. Penney as “outdated.”
“We have to get a younger customer,” he said, noting that the current Penney customer is among the oldest in retail.
He also added that the company has now simplified its pricing, and now simply offers “everyday” pricing and clearance.
“The challenge is how do you make sure people believe the value is right,” he said.