Things have been relatively quiet at JCPenney
That does not necessarily mean that nothing is happening at JCPenney. It’s just that the retailer has been reluctant to provide any updates, either to the public or its large workforce.
In response to a February request for information, a company spokesperson responded, “We’re still in the process of reorganizing JCP and are seeing some early improvements.” The representative continued that the retailer “should have more to discuss…in about a month.” That spokesperson has since left the company.
When asked for a follow-up earlier this week, a new communications person simply stated that JCPenney has “no new updates to share right now.”
According to an online employee discussion forum, JCPenney employees are hungry for news. Many have expressed valid concerns, including conflicting pension information and future closing rumors. They feel that there is “no guidance anymore” from the corporate office.
Employees wonder if their reduction in work hours is temporary or permanent? Full-time employees fear that the new owners are only interested in a part-time salesforce, with no benefits.
After it filed for Chapter 11 bankruptcy protection on May 15, the 119-year old retailer sought new ownership. Simon Property
Simon and Brookfield’s co-purchase of JCPenney allowed the retailer to exit bankruptcy protection on December 7. That morning, CEO Jill Soltau praised the efforts and commitment of both firms for keeping the storied brand alive. “Today is an exciting day for our company as we have accomplished our goal of putting JCPenney on a secure path for the future.”
However, Soltau’s public praise of Simon and Brookfield was short-lived. By the end of December, Soltau and JCPenney parted ways and five members of the retailer’s board of directors resigned.
It remains unclear if Soltau’s controversial $4.5 million retention bonus, negotiated just before the retailer’s May bankruptcy filing, was paid to the dismissed CEO. That agreement stated that Soltau had to stay with the firm through January 31, 2021, in order to receive the full payment.
Upon Soltau’s departure, the company announced that a search for a permanent CEO who was “focused on modern retail, the customer experience, and the goal of creating a sustainable and enduring JCPenney” would shortly get underway. Stanley Shashoua, Simon Property’s Chief Investment Officer, became JCPenney’s interim Chief Executive Order on January 1, 2021.
However, JCPenney has not released any updates on its search for a permanent CEO. With a professional bio that lacks corporate retail experience, Shashoua’s appointment as CEO was deemed temporary.
Shashoua is not the only interim executive member of the retailer’s team. Four of the 13-member team have the word “interim” in their job titles.
Last December, David Simon, CEO of the Simon Property Group, proudly declared that JCPenney is “now poised for a future focused on innovation and consumers, while continuing to navigate through the pandemic.”
However, the only new development is the release of its exclusive Fieldcrest home department line. The 125-year old Fieldcrest brand was last exclusively offered by Target
JCPenney will be forced to reinvent its cosmetic and perfume departments. Last December, Sephora ended its partnership with the retailer and engaged in a 10-year “strategic partnership” with Kohl’s
Simon and Brookfield’s recent fourth quarter reports make little to no reference of its new co-ownership of JCPenney. Simon’s report mentions that the firm “made strategic investments in widely recognized retail brands at attractive valuations and have already made significant progress in representing these brands.” However, Brookfield’s corporate website yields “no results” when a search of “JCPenney” is conducted.
Surprisingly, JCPenney has not even updated its own corporate website. It’s still largely stuck in 2019, though the executive leadership page appears to be up-to-date. The site currently states that the company operates approximately 850 locations. But that figure has dropped significantly and is expected to drop further. In February, JCPenney was down to 689 locations.
JCPenney’s corporate website does proudly announce and discuss the July 2018 grand opening of its new location at Brooklyn’s Kings Plaza shopping mall. This “sleek and modern” store with its “engaging environment” and “impactful graphics” promises a reinvigorated image for the retailer. Unfortunately, that location closed last September, after a short two-year run.
JCPenney has continued with a another round of store closures, announced last December. 18 stores, from Idaho to Massachusetts, began their final liquidation sale in late January. Those stores are expected to close on May 16.
Last May’s bankruptcy filing came as no surprise. The retailer hasn’t posted an annual profit since 2010. The massive amount of accumulated debt has been further impacted by executive changes and merchandising mistakes. COVID-19 is not the reason for the company’s woes. The pandemic probably simply pushed it over the edge.
Last summer, many analysts doubted that JCPenney would make it through 2020. Some felt that the firm was too crippled and damaged to survive. The retailer even abandoned its Plano, Texas corporate campus. But the company has proven those skeptics wrong. JCPenney is still open.
It’s unknown what the future will hold for the iconic retailer. Do Simon and Brookfield truly intend to invest in JCPenney, or are they merely using these newly-acquired department stores as placeholders in their shopping malls?
JCPenney’s leadership needs to determine and divulge a true long range plan for the department store firm. To continue to prove skeptics wrong, they also need to communicate and provide updates. Its 60,000-member workforce deserves to know that a future is truly possible.