J.C. Penney Company, Inc. (JCP): Addiction Renewed

Uncertain future

The key to JCP’s future success relies on deciding what customer base the store wants to woo, and marketing the store’s direction with that in mind. There will be bumps in the road but without bolder actions, JCP won’t even have the road.

Using Target Corporation (NYSE:TGT) is an a slight apples to oranges comparison since those locations offer a far wider range of products. But it’s the generally apparel-centric brand launches that have garnered the most attention for the retailer and upped its image.

Not all of those launches have proven successful. After sellout collaborations with individual high-end designers including Missoni, a holiday 2012 partnership with Neiman Marcus floundered. Customers found the products, which included a $500 bicycle, too expensive for what they expected from Target Corporation (NYSE:TGT). The retailer was forced to deeply slash prices, and the endeavor was largely considered a failure.

But Target Corporation (NYSE:TGT) can readjust to customer needs and launch another lower priced designer line to greater success. And that’s the kind of risk taking, and adjustment, that JCP needs to learn.

Foolish final thoughts

JCP won’t have a true recovery until the store is willing to take a firm stance on its identity. Bringing back coupons is a good way to get customers through the door. But that’s a temporary fix.

And investors shouldn’t get too excited about Soros involvement. He went the 13G route, meaning he intends to remain passive. Bill Ackman already tried to hype the company with an 18% stake and a multi-slide presentation touting Johnson’s vision. Ackman was later at the forefront of Johnson’s ousting.

The article 1 Problem This Retailer Can’t Shake originally appeared on Fool.com.

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