Turnaround of JC Penny
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Case Details:
Case Code : BSTR160
Case Length : 15 Pages
Period : 1990 - 2005
Organization : J C PENNEY
Pub Date : 2005
Teaching Note : Available
Countries : USA
Industry : Retailing
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Background Note Contd...
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Within two years, another store was opened and in 1907, Penney bought the stakes
of his partners. The company showed spectacular growth and in 1920, it had 312
stores in 26 states. It was incorporated as The J C Penney Company in 1924. By
1930, JCP was operating 1,452 stores and had 25,000 associates3
on its rolls. Its sales revenue exceeded $ 1 billion in 1951 and in 1964, it
doubled to $ 2 billion from nearly 1700 stores.
In 1998, JCP launched its Internet store through which the company put its
250,000 products online. JCP, which provided merchandise and services through
department stores, catalogs, and the Internet, had a net sale of $17 billion in
2003.
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In 2003, JCP had 1020 department stores in the US and 58 Renner4
department stores in Brazil (Refer Exhibit I (a) and I (b) for a list of JCP
stores). It had an employee strength of 150,000 associates and was the
largest catalog merchant of general merchandise in US. The catalog ordering
network of JCP, JCPenney Direct (Direct), handled 35 million telephone calls
in 2003.
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Direct's
four logistics centers processed more than 33 million orders in 2003.
Catalog sales and sales through the Internet totaled $2.6 billion in
2003. Marketing synergy among retail stores, catalog offerings, and
online sales resulted in annual online sales growing from $15 million in
1998 to more than $600 million in 2003. In 2004, the online store of JCP
had a conversion factor of 10.1%5, the
highest among its general merchandise peers.
Some of JCP's brands were JCPenney Home Collection, St John's Bay,
Arizona, Worthington, Stafford, Delicates, and Okie Dokie. JCP also
offered salon services, optical services, portrait photography, and
custom decorating. In 2004, JCP sold its Eckerd Drugstore chain6
to CVS Corp. and the Jean Coutu Group Inc. for $4.5 billion... |
Excerpts >>
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