Did Penney announce its appliance rollout to change the discussion?
This column is a speculative exercise.
In today’s 24/7 cable news and social media world, it’s become imperative that organizations — from political campaigns to businesses — are ready to respond to and/or move the media away from the latest story in a cycle. That’s what makes the timing of J.C. Penney’s announcement that it will expand sales of major kitchen and laundry appliances to nearly 500 stores and jcp.com so interesting.
Those following the department store chain know that press coverage has been largely positive. Penney is one of the few in its channel, for example, to post positive year-over-year same-store sales during the fourth quarter holiday season. But last Thursday night (9:46 p.m. ET), the New York Post broke a story that Penney took “drastic cost-cutting steps in an attempt to protect its bottom line” in mid-April after experiencing sales that were below the company’s expectations.
Reactions to the Post report caused Penney’s stock to fall Friday morning. So, with this negative story out there, what did Penney do? Kept quiet until Monday and then announced that the pilot appliance program the company ran in 22 stores in San Antonio, San Diego and Tampa was a success. Such a success, in fact, that Penney was announcing the news ahead of its next earnings report on Friday of this week.
Penney’s press release said the company would begin the rollout of appliances to other stores in early July and complete it in the fall.
“The pilot confirmed that we should not limit our business to apparel and soft home in order to achieve significant revenue growth,” said Marvin Ellison, Penney’s CEO, in a press release. “Additionally, we are pleased with our EBITDA performance in the first quarter, and remain on track in reaching our 2016 EBITDA objectives.”
The second portion of Mr. Ellison’s statement was unrelated to appliance announcement, yet partially addressed the Post report without getting into details. It will be interesting to see what Penney reports on its next earnings call and how company executives respond to analysts’ questions.
- JCPenney takes emergency measures to protect bottom line – New York Post
- JCPenney Expands Major Appliances to jcp.com and 500 Stores Nationwide – J.C. Penney Company, Inc.
- New JCPenney Job Cuts Drop Shares 8% – 24/7 Wall St.
- Plano-based Penney flips home sales focus from furniture to appliances, more – The Dallas Morning News
Do you think J.C. Penney used its appliance announcement to change the topic from sales issues in April to something more positive? How adept are most retailers in responding to negative news in ways that help give them control over their own narrative?