J.C. Penney reported a loss of $123 million, or 56 cents a share, in the third… (David Pardo / Associated…)
Ever since Apple Inc. alumni Ron Johnson took over as chief executive of J.C. Penney Co. the department store chain has been deep in the throes of a transformation that has so far confused shoppers and depressed sales.
Now its third-quarter results show continued losses that are a worrisome sign for the holiday season.
For the three months ended Oct. 27, the retailer on Friday reported a loss of $123 million, or 56 cents a share, slightly better than the loss of $143 million, or 67 cents a share, in the same period a year ago. Sales plunged 27% to $2.93 billion.
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Johnson on Friday said the company was still reconciling the two faces of the company -- the "old" retailer before he came aboard and the "new" one undergoing sweeping changes.
"By far the largest part of our stores is the old J.C. Penney, which continues to struggle and experience significant challenges as evidenced by our third quarter results," Johnson said in a statement. "However, the new JCP, centered around the store concept, is gaining traction with customers every day."
Johnson has been pushing the shop-in-shop strategy to bring 100 such mini-boutiques carrying brands such as Walt Disney Co. and Martha Stewart to compete with rivals such as Macy's.
But the retailer's new pricing strategy unveiled earlier this year -- which involves no sales or coupons, just an emphasis on everyday low prices and special deals on certain days of the month -- has confused shoppers accustomed to new promotions virtually every week, analysts say.
That problem was made worse, industry experts say, when J.C. Penney backpedaled somewhat on its no-coupon, no-sales vow. The company has recently issued $10 coupons, advertised free haircuts for children and also promotions on clearance items.
Johnson said in September that the last two quarters of the year, which includes the all-important holiday shopping season, could be similar to the weak first two.
Shares of J.C. Penney dropped $1.31, or 6%, to $20.38 in midday trading Friday.
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