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JCPenney’s Woes Take Focus Off Stumbling Sears

03/19/2013

Dropping-Sales-ChartSears, the once-venerable and now lagging retailer, has a lot to be thankful for when it comes to JCPenney.

JCP’s mis-steps have redirected attention from the stumbling of Sears to the bumbling of  Penney’s.

Worse still, JCPenney’s woes have benefited Sears as they are often neighbors in malls across the US.

JCPenney is in the midst of a fight for its life. CEO Ron Johnson’s vision for a new retail brand has driven JCP’s core customers away in droves. Unfortunately for JCP and Johnson they’ve not been successful at replacing former customers with new, more-youthful, hipper customers. Without a back up plan JCP has walked back multiple statements about its new direction – including bringing back a sale/mark down strategy that doesn’t require an MBA to understand.

Sears sales have fallen every year since 2005, when hedge fund manager Edward Lampert merged two of America’s iconic retail chains, Kmart and Sears Roebuck and Co, in an $11 billion deal.

However, Sears Holdings has boosted results in recent quarters by closing stores, managing inventory, selling some real estate and shedding assets. Wait a sec…aren’t retailers supposed to boost results by selling product?

Sears, home to the iconic Craftsman tool and Kenmore appliance brands, faces cut-throat competition from the likes of Home Depot, Lowe’s, Wal-Mart, Target, Best Buy, Macy’s and Kohl’s. Oh, and did I mention that pesky internet thing?

A quick trip to Sears on Saturday reveals the cold, hard truth. The store is awful. The merchandise is dreadful…even the Lands’ End concept store looked unkempt and dowdy. The layout is a maze. The staff, dressed in black, look depressing.

It is not entirely unrealistic to predict that we’ll be blowing taps for both Sears and JCPenney in 2014. The real questions is – will anyone notice?

 

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