The 110-year old company hasn’t been profitable since 2010 and its prospects are bleak. JCPenney (JCP) is $4 billion in debt with a junk credit rating, sinking cash and no indication of a turnaround in sight.
With few shoppers coming to shops, JCPenney faces stock and supply chain fights and no clear marketing plan or strategy. The company has been made to offer steep discounts on clothing to clear its gigantic inventory glut.
Last month, JCPenney reported a $151 million third-quarter loss and a 5.4% drop in sales. The stock has fallen 68% annually and almost 30 percent in December alone.
Jill Soltau, formerly the boss of Jo-Ann Stores, became CEO in October — the organization’s fourth in six years. Soltau has her job cut out for her.
The business’s leaders said they are considering closing some of JCPenney’s remaining 860 stores. That might help JCPenney in the near-term, but its long-term prospects are questionable. The company has a $2.1 billion debt payment due in 2023. Wall Street analysts are skeptical about JCPenney’s ability to repay this money.
A spokeswoman for JCPenney declined to comment.
The company never really recovered from the Great Recession. It dropped shoppers to cheaper sellers a decade ago and struggled to bring them back as the economy started to rebound. It lacked the cash to improve shops, buy trendy merchandise or hire more workers.
The company switched its attention several times over the past few years: from older shoppers to younger, trendier ones back toward middle-aged women.
JCPenney has just changed its merchandising strategy, chasing proven sales trends instead of filling up stores with inventory. It began selling appliances a few years back, but that strategy hasn’t paid off .