How sweet is this tweet from Marie Claire fashion director and “Project Runway” judge Nina Garcia: “'I’m @jcpenney's HQ. Thank you Ron Johson (sic) for the walk through of JCP’s prototype. Get ready to shop! Its going to be a game changer!”
Well, the stock zoomed almost 10% before settling at a nearly 5% gain for the day after Garcia hit the Tweet button a few minutes before 2 p.m. EDT.
Apparently, it doesn’t matter that Garcia might be construed as a less-than-impartial voice after cutting a deal to be the retailer’s "resident Style Voice and fashion collection curator," as a press release put it last week. “This means she'll help the retailer's merchandise and design teams figure out what's trendy, as well as drum up publicity through social media and public appearances,” blogged Charlotte Cowles in New York’s “The Cut.”
If Garcia proves as effective in trendspotting as she apparently has in drumbeating, Penney may have found the transformative bullet it has been seeking to reverse its downward spiral.
“Investors attributed the rally to short-sellers, who bought Penney shares after Garcia’s tweet in order to close out bets that the company’s stock will continue to decline,” James Covert writes in the New York Post. “Some analysts questioned whether the tweet by Garcia caused the stock move,” writes Reuters’ Brad Dorfman and Doris Frankel, “but could not point to another reason for the jump.”
That’s interesting because sources tell the Wall Street Journal’s Dana Mattioli that Penney is about to “make deep price cuts across much of its merchandise, which is “a significant shift in tactics” for CEO Ron Johnson. Starting next month, Mattioli reports, the retailer “will get rid of month-long specials that cut prices of select items by 20% to 29% and instead will permanently mark down a large amount of merchandise in stores by similar amounts.”
A Penney spokeswoman confirmed the elimination of month-long pricing. Mattioli points out that it’s not only a recognition that the chain needs deeper price cuts after eliminating sales and coupons but also is “an attempt to clarify for consumers what Penney executives acknowledge has been a confusing pricing strategy.”
Plain and simple, here’s what they’ll now get: “Everyday low prices and clearance sales on certain items.”
The company also announced a four-year deal yesterday with Loblaw’s Joe Fresh cheap-chic fashion line that will put almost 700 branded boutiques within its stores. The Joe Fresh line itself “has been one of the few engines of growth” for the Canadian “grocery titan,” reports the Toronto Globe and Mail.
“Ron is looking for brands –- he’s looking to really differentiate himself in the United States,” Joe Fresh creative director Joe Mimran tells the Globe and Mail’s Marina Strauss. “He’s looking to transform the business and he wants to do it with innovation. I think our brand offers that.”
Reports Bloomberg’s Ari Altstedter: “The ‘store-within-a-store’ concept will see Loblaw act as a wholesaler while retaining final say on how Joe Fresh products are displayed and marketed,” Loblaw president Vicente Trius told analysts on a conference call.
Other branded shops within Penney featuring merchandise from Levi Strauss, Jeans by Buffalo and Penney's Arizona brand will open in August. There will be six shops in each store -- one each in young men's and juniors.
“After six months of talking about it, the first signs of J.C. Penney's physical transformation are beginning to show up,” reports the Dallas Morning News’ Maria Halkias. “Instead of one big traditional department store, think of streets lined with shops and a town square in the middle.”
Speaking of tradition, a venerable Penney store in San Fernando, Calif., is in its last throes, with 50%-off sales on remaining merchandise despite a community rally and online petition to keep the doors open. The retailer has had a presence in the city northeast of downtown Los Angeles since 1920.
"We've been hearing that they are rebranding and the San Fernando store did not fit with their vision," San Fernando city administrator Al Hernandez tells Susan Abram of the Contra Costa Times.
“It's not about nostalgia," says community activist Julian Ruelas, who charges the retailer is not responding to questions about why it is closing and is “not being a good corporate neighbor.”
The owner of the 60,000-square-foot building Penney occupies says the company is ignoring him, too. "Their lease isn't up yet. I think the bottom line is, J.C. Penney is in turmoil and we really think they are overlooking their community."
As legit as Penney’s business reasons for closing the store may be, it seems to be a bad PR effort, any way you cut it. Maybe it should send in Nina Garcia and her magical smartphone.