J.C. Penney (JCP): Three Reasons The Company Is Living on Borrowed Time

3. Big-box retail is on its way out.
As if it weren’t bad enough that its competitors have benefited from its woes, J.C. Penney has to deal with the longer-term trend that has threatened not just it but big-box retail in general: the rise of the Internet. Given the competitive advantage that online retailers have in avoiding the sizable overhead involved in maintaining stores, inventory, and staff, J.C. Penney would have faced a challenge even if it had remained healthy. To expect a second-time CEO to come up with a viable strategy to compete against peers with physical stores and against online companies without them is too much to expect.

What’s next?
Even if J.C. Penney Company, Inc. (NYSE:JCP) eventually goes out of business, that doesn’t mean that the stock is a must-sell at beaten-down prices. Ackman and other interested investors will inevitably take steps to extract as much value as they can from the retailer. But J.C. Penney will never return to its former glory unless it shows a previously unseen ability to develop a compelling strategy to appeal to shoppers, and that seems extremely unlikely at this point.

The article 3 Reasons J.C. Penney Is Living on Borrowed Time originally appeared on Fool.com.

Fool contributor Dan Caplinger has no position in any stocks mentioned, and neither does The Motley Fool. You can follow Dan on Twitter @DanCaplinger.

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