J. C. Penney Company on Monday announced that Edward Record will step down from his position as executive vice president, chief financial officer effective July 11 to "pursue other interests," according to a company press release.
He’ll remain with the company as an advisor until Aug. 7 to assist with the transition during the search for his replacement, the company said in a press release. Andrew Drexler, senior vice president, chief accounting officer and controller, will take on the role of interim chief financial officer, along with his current duties.
Meanwhile, the discount department store is instituting upgrades to its loyalty program, according to the Dallas Morning News, which compared the changes to the popular points system of rival Kohl’s.
J.C. Penney is making some bold changes, especially under Marvin Ellison (but perhaps not so bold as under Ron Johnson) but the retailer continues to struggle as it shutters stores and apparel sales remain elusive. In May the company reported a first quarter net loss of $180 million or 58 cents per share, worse than the $68 million net loss or 22 cents per share in the year-ago period, as overall sales fell 3.7% to $2.7 billion (from $2.8 billion a year ago) and same-store sales fell 3.5%, missing analyst forecasts. Investments in pricing and merchandising systems, combined with growth in appliances and e-commerce, led to a 10 basis point increase in gross margin compared to the year-ago quarter.
There are bright spots. Same-store sales in the last quarter rose in home, fine jewelry and salon categories, as well as its Sephora concession shops, and they were the top performing divisions in the quarter. Despite that tough quarter, the company reaffirmed its 2017 full year guidance. Executives expect same-store sales growth to fall between a 1% decline and a 1% rise and gross margins to rise 20 to 40 basis points over the prior year.
Despite improvements in women’s apparel, which dragged down results last year, the retailer must redouble efforts in that category and continue marketing efforts to entice shoppers into stores, GlobalData Retail managing director Neil Saunders said in a note emailed to Retail Dive. “Despite the enhancements made to date, the offer is still not compelling enough to drive sales,” Saunders said of J. C. Penney’s fashion play. “Spring collections showed some signs of improvement, but there is much more work to do here if J.C. Penney is to turn this into a winning category.”
But the company’s real star is the Sephora concessions, Saunders said. “The impact of having a popular beauty player as part of the offer cannot be underestimated,” he said “Without it, customer traffic and sales would have tumbled far further and faster; and J.C. Penney would have attracted far fewer younger shoppers.”
No surprise, then that the company would boost its loyalty program, easing points accumulation for Sephora customers, according to the Dallas Morning News report. Shoppers can now acrue points in both programs and J.C. Penney platinum cardmembers will also be able to earn bonus points on special Sephora inside J.C. Penney events, according to a statement from J.C. Penney emailed to Retail Dive.
Additional new benefits include the ability to earn $10 rewards for every $200 spent, members-only pricing on select items and special shopping events and bonuses. There is also a new website that integrates the rewards program into the retailer's main site, according to the company.
The ability to more quickly run up (and roll over) points, akin to Kohl's popular program, could win over a lot of shoppers. Shelley E. Kohan, vice president of retail consulting at store analytics firm RetailNext, calls the Kohl's Cash program “brilliant.”
“There’s something about the ‘Kohl’s cash’ that drives the consumer to really plan their shopping around their Kohl’s cash,” Kohan told Retail Dive last year. “People are spending so much effort and time in converting, they have a strong bond with the customer and are known for that low price.”