Case Study: Jcpenney

James Cash Penney founded JCPenney in 1902 in Kemmerer, Wyoming. It was originally called J.C. Penney Corporation, Inc. JCPenney is known for selling clothing, home furnishings, jewelry, makeup, and cooking supplies. JCPenney has a partnership with Sephora and Ralph Lauren, which are big name brands. Their current headquarters is located in Plano, Texas. The amount of JCPenney store has been decreasing for years. In 2016 the company had 1,021 stores left, but in 2017 JCPenney announced that they would be closing 130 to 140 stores. So today there are less that 1,000 JCPenney stores left (Britannica, Feb) (Bomey, 2017) About 6 years ago in 2012 JCPenney decided to try a new type of strategy to try and help the business. The new strategy was called “Fair and Square.” This was a way that the store could get more return on their products but still give the customers a far discount. They were hoping that this would draw in new customers. JCPenney want to attract customers that were looking for brand name products for a good price. One environmental factor that contributed to the “Fair and Square” launch was that JCPenney frequent sales were not earning them any money it was actually costing them. Also the Great Recession affected the industry greatly. The annual revenue had fallen $152 million in net loss. (Tuttle, 2012)
Many customers that go to JCPenney stores are loyal customers that enjoyed the store how they were did not like when they changed. The prices had risen and the deals were not as good. Customers only tended to come when it was a big sale or they were looking for something specific. Not only did “Fair and Square” affect the customers but it affected the stores. EDLP was the cause for JCPenney. It raised their prices and caused them to spend more money on the name brand products. Many other stores saw what EDLP did to JCPenney and avoiding it. (Bomey,