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J.C. Penney treads water on the web
The retail chain has hovered around $1.5 billion in online revenue since 2007.
Associate Director of Research
Fresh from proclaiming a four-year plan aimed at revitalizing its brand by improving the in-store experience, J.C. Penney Co. Inc. yesterday reported another year of stagnant web sales along with declining overall revenue in 2011.
For the full year ended Jan. 28, J.C. Penney, No. 20 in the Internet Retailer Top 500 Guide, posted:
- Web sales of $1.5 billion, representing essentially no change from fiscal 2010. Online revenue has been around $1.5 billion for J. C. Penney since 2007.
- Total sales of $17.3 billion, a 2.8% drop from $17.8 billion last year.
- Comparable-store sales increased 0.2%.
Internet Retailer calculates that the web comprised 8.7% of total sales in 2011 compared with 8.4% in 2010.
J.C. Penney last month announced several initiatives aimed at remaking its image to become, in its words, “America’s favorite store.” Those include renovations to its 1,100 retail stores, simplifying product pricing and revamping its marketing. The retailer also recently announced plans to shut down its subsidiary e-commerce sites CladMen.com and GiftingGrace.com in April, about six months after their launch in November. The retailer says it is shuttering the e-retail sites to focus on the J.C. Penney brand efforts, including its main e-commerce site, JCP.com.
"As we embark on this transformation, the strategic changes we are making to our business model will dramatically simplify J. C. Penney's operations, significantly lower the company's cost structure and create a platform for growth that will result in improved profitability in 2012 and beyond," says CEO Ron Johnson.
While e-retail sales industry-wide grew 15.5% during Q4, according to the U.S. Commerce Department, J.C. Penney’s web sales declined. The retailer reported:
- Web sales of $480 million, a 3.0% decrease from $495 million in the fourth quarter of last year.
- Total sales of $5.4 billion, a 5.3% drop from $5.7 billion in 2010.
- Comparable-store sales declined 1.8%.
Internet Retailer calculates that the web comprised 8.9% of total sales in the fourth quarter, compared with 8.7% in the same period of the prior year.