J.C. Penney is still striving to become 'America's Favorite Store'

By Janet H. Cho

CLEVELAND, Ohio -- Eight months into Chief Executive Ron Johnson's mission to turn J.C. Penney Co. into America's favorite store, shoppers and retail experts are still giving his efforts mixed reviews.

On the one hand, consumers have embraced his bright, colorful catalogs and store-within-a-store brand shops.

And parents brought more than 1.6 million children to J.C. Penney's salons for free back-to-school haircuts last month.

But that enthusiasm hasn't translated to the company's balance sheets.

J.C. Penney's company's share price has dropped 37 percent since the campaign was launched on Feb. 1, including a $3.26 single-day drop to $25.83 on Thursday.

The company reported a $310 million loss for the first six months of the rebranding, with net sales down 21.3 percent to $6.17 billion as of July 28.

Yet some branding and retail consultants remain optimistic about what Johnson is trying to do with what had been a reliably middle-of-the-road, 110-year-old department store chain.

Ed Fox, director of the JCPenney Center for Retail Excellence and associate professor of marketing at the SMU Cox School of Business in Dallas, noted that J.C. Penney has somewhat backed off from this approach, reintroducing promotions and offering deeper discounts on select items.

"When you shift to an everyday low-price strategy, you need to make it up in volume," as Walmart does, to compensate for the slimmer profits on each item, he said.

"This is a very heavy lift, what he's trying to do," Fox said....