Comment by SoftwareMaven | Hacker News Reader

Comment by SoftwareMaven | Hacker News Reader

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After talking with my brother-in-law about what has happened on the JCP sales floor, I don't see how they can survive. I think they were probably in death throws before the new CEO and I'm not sure Johnson could have saved them, but now, there's no stopping the death throws.

Johnson was trying to take JCP upmarket (not so much in price/quality as in type of customer) because he knew they were going to be completely squeezed out by the logistics capabilities of stores like Target. Unfortunately, that kind of process takes years and a lot of courage because you will alienate many, if not most, existing customers before new customers come.

But JCP did the worst thing: they stopped right after alienating their existing customers. I think my brother-in-law will be looking for a new job soon. I will have a great deal of respect for the new CEO if they can bring JCP back to their previous level of "glory" and maintain it.

Another major issue with going "up-market" for JCP was their retail space situation. Many of their stores were in areas that didn't have a significant market share of higher-income families. If they did have higher income families, the market was already saturated with other higher-end retail stores.

Many of their stores also suffered from high rent even in failing malls, exacerbating their losses as suburban malls failed.

If JCP didn't have their retail lease obligations, they may have succeeded in pivoting to higher market consumers and transitioning to smaller stores and tighter, more informed staff. However, they have decade+ long leases on anchor stores in malls with massive financial penalties for early withdrawal, so they are stuck with massive amounts of retail floor. It's one thing to change your business strategy wit 4,000 square foot retail spaces; it's entirely different if you're locked into 40,000 square feet in hundreds of malls!

I liked where Johnson was going, but it's unfortunate we didn't get to see if his plan would have played out.

Any idea how Kohls is doing? They're essentially the same as JCP.

It doesn't matter at all, but the expression is "in the throes of death", not "in death throws".

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