J.C. Penney's Black Friday plan looks a little different
Nov 15, 2012 (Menafn - The Oregonian - McClatchy-Tribune Information Services via COMTEX) --Black Friday, the day-after-Thanksgiving kickoff to the holiday shopping season, starts this year for many big retailers the night before.
Walmart, Toys 'R' Us and Kmart will open at 8 p.m., Thursday, followed by Target at 9 p.m.
Only J.C. Penney, the department store chain that's struggled to revamp its brand over the past year, will actually open on Black Friday -- at 6 a.m. instead of its usual 4.
For shoppers who resent so-called Christmas creep, which they say places unbridled commercialism ahead of a family holiday, the move is good. Indeed, 6 a.m. is downright civilized compared with other big retailers' schedules, many of which run nonstop for much of the weekend.
Others wonder whether it's just one more way the Plano, Texas-based retailer is differentiating itself from the usual department store and discount players.
Wall Street isn't so sure.
The holiday shopping announcement came this week, just days after J.C. Penney Corp. Inc. posted a 123 million loss last quarter amid a 26.1 percent drop in sales. By midweek, the retailer's stock had been downgraded, and its shares closed Thursday at a 52-week low of 16.50.
The message from some analysts who'd hung on through new Chief Executive Ron Johnson's companywide makeover, including eliminating the chain's regular sales and coupon-based deals, morphed this week from do-able to possibly dooming.
In a report Monday, Credit Suisse analysts wrote, "Time is no longer on J.C. Penney's side." The analysts, who lowered the retailer's stock from "neutral" to "underperform," said that Penney's must stem the sales decline or "management's attempt to bet the company could become more problematic."
Jennifer Black, a retail analyst based in Lake Oswego, said that for a company struggling to lure in shoppers, avoiding the risk of empty stores through the wee hours may be a good idea.
"Let's say they did open at 3 a.m., that may be throwing bad money after bad money in this particular case," said Black, who attended Penney's last few analyst meetings. "I don't think that's the worst thing they've done."
Black said the department store's recent offers of free haircuts and free family portraits throughout November are smart. However, she and others aren't so sure who the retailer is trying to reach with its new branding.
Indeed, some local shoppers aren't wowed by the retailer's merchandise and say it feels as though fewer items are in the store. Others like the "fair and square" pricing, which promises one price on goods without a need for sales or coupons. Yet that's confusing to some customers as the retailer still has sales -- some markdowns that last a month and other items put on clearance twice a month.
Even in his announcement about the holidays, CEO Johnson trumpeted discounts that supposedly aren't necessary under his new plan.
"Black Friday is America's greatest shopping tradition and we're celebrating the occasion with our only sale of the year," Johnson said in a company release. "All day long, customers will find some of our lowest prices ever..."
In a CNBC interview, board member and major investor William Ackman said this week that the plan will work, eventually. Johnson is creating a "startup," he said, from the ashes of the nearly century-old company.
"J.C. Penney historically has been a very promotional department store," Ackman continued. "As part of the transformation, Ron has gone on to launch the fastest growing specialty retailer."
By creating mini "stores" divided by brand or product, the company is modernizing stores and will eventually squeeze out more sales per square foot, a typical retail measurement of success. Currently, he said, traditional stores bring in about 135 per square foot, while the mini stores achieve 270.
A small percentage of the company's stores have been renovated, he said, adding that the entire process will take some time.
And for customers, more persuasive.
Among the holiday changes, Penney's ditched a tradition of giving snow globes to Black Friday's early risers. Employees will pass out 80 million little metal pins featuring codes shoppers can punch into their phones to see if they've won prizes ranging from a 10 gift card to a family vacations.
"Really no snow globes???? That was my main reason for stopping at JCPenney's on Black Friday," shopper Carolyn Kauffman wrote on Penney's Facebook page. "Change can be good but the button thing sucks!"
-- LGunderson@oregonian.com
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