In an effort to revitalize the renowned but ailing 121-year-old department store business, JCPenney announced Thursday that it expects to invest more than $1 billion by the end of 2025.
The funds will be used to upgrade JCPenney locations, the company’s website and mobile app, and its supply chain in order to speed up the delivery of online orders.
Marc Rosen, the CEO of JCPenney since November 2021 and a former executive at Levi Strauss and Walmart, is refocusing the retailer’s attention on its core middle-class customers by offering them reasonably priced clothing and housewares.
In an interview with The Associated Press, Rosen stated that “now is the time more than ever to lean into that and make sure that we’re delivering that experience for our customer.
That represents a shift in strategy from previous management teams that sought out wealthier customers with offers of large appliances and trendy goods.
The proposals outlined on Thursday include replacing the check-out terminals that were spread out throughout JCPenney’s stores with a single section of cashiers.
Additionally, shoppers will notice new paint and better lighting. Mobile devices will be provided to store personnel so they may scan inventory and ring up customers’ purchases.
Additionally, the company is upgrading its Wi-Fi networks to boost in-store connections.
The difficulties encountered by the Texas-based retailer JCPenney are highlighted by the fact that it is currently lagging behind its rivals, who range from discounters to department stores like Macy’s and Walmart, who have been modernizing their physical locations and online sites.
JCPenney, which came out of Chapter 11 restructuring in December 2020 with new owners, not only had to deal with internal problems for years but also had to contend with an unstable economy that put pressure on more wholesome department stores.
The majority of the chain’s clients are frugal families with typical incomes between $50,000 and $75,000 that frequent it frequently.
They have been particularly severely hit by rising prices for necessities and high interest rates, which make using credit cards for borrowing money and getting a mortgage more expensive.
Rosen claimed that just for the bare basics like rent, gasoline, and food, JCPenney consumers are now spending $700 more per month than they were two years ago.
He said customers want fair prices and a pleasurable shopping experience. Rosen added that JCPenney has a role in this difficult economy.
According to him, consumers find competing department stores to be too pricey, and online sellers and discount shops don’t provide the kind of customer service that JCPenney customers want.
The pandemic-induced temporary store closings further endangered the already precarious merchant, who then filed for bankruptcy reorganization in May 2020.
Nearly a quarter of JCPenney’s 850 stores were closed under the management of new owners Simon Property Group Inc. and Brookfield Property Partners LP, mall companies. It currently has over 650 stores. According to Rosen, its debt has decreased from about $5 billion when it filed for bankruptcy to less than $500 million now.
Rosen claimed that 100 locations have undergone renovations as part of the most recent remodeling campaign. He stated that anything between 50 and 100 remodels are expected each year.
The company has been reestablishing its cosmetics division ever since Sephora declared three years ago that it would be leaving the chain for competitor Kohl’s. It has been emphasizing beauty products that cover a wider range of skin tones as part of its revamp.
The company has a third of consumers of color. The business claimed that more than 50% of the owners of its beauty brands are either women or people of color.