JC Penney Gets it Wrong Again
Karen is a member of The Motley Fool Blog Network -- entries represent the personal opinion of the blogger and are not formally edited.
It’s back to school time and this year’s JC Penney’s (NYSE: JCP) television ad campaign convinced me not to shop there for my grandson’s clothing and school supplies.
The song “Get Ready” (apparently no one bothered to listen to the full lyrics) blares as elementary aged children prance down the runway in a ridiculous supermodel parody. Little boys stand beside school lockers and smile while appraising the little girls that walk past clad in JC Penney clothes.
This isn’t the first time JC Penney’s ads have alienated their shoppers. Remember last year’s disastrous “I’m Too Pretty To Do Homework” T-shirt aimed at 7-16 year old girls? This year’s ad is almost that bad and makes the store look out of sync when compared to its rivals.
New CEO Ron Johnson presides over a company with a 52-week price performance of -27.10% and an EPS of -$1.76. The company’s April 2012 revenue was $16.5 billion and the current stock price is around $21.00. Wall Street analysts continue to rate the company as very bearish.
The advertising brains at JC Penney should have paid attention to their Target (NYSE: TGT) competitor. Three thirty second commercials feature a music teacher, science teacher and elementary school teacher singing what the kids need for school while showcasing Target clothes. The child models look and act like kids. I feel comfortable shopping there and apparently so do others. The stock's 52-week price performance is 30.43% with an EPS of $4.34. The market cap is considerably higher than Penney’s, standing at $41.2 billion, and Target reported revenue of $70.8 billion as of April 2012. Analysts are bullish on the company.
K-Mart’s back-to-school ads not only did a good job showcasing their clothing and school supplies, but got it right with “Queen of Lay-A-Way.” With so many parents feeling the economic pinch, K-Mart’s lay-a-way policy lets parents spread out the payments for their kid’s clothes and get an additional 5% off the cost of their lay-a-way items.
K-Mart is owned by Sears Holding Company (NASDAQ: SHLD) and, although K-Mart has found its niche and will forever be remembered for their “blue light special,” Sears continues to struggle against its rivals. The holding company’s 52-week stock performance is a dismal -26.24% with a negative EPS of -$25.97, and analysts are bearish on the stock.
The child actors featured in Old Navy ads are every bit as over-the-top as their adult counterparts. The ads are silly and sometimes funny, but definitely not offensive. Old Navy is owned by Gap, Inc. (NYSE: GPS), and Gap’s 52-week stock performance stands at an astounding 97.06%. The company's market cap is $16.4 billion with revenue stated at $14.9 billion. Analysts are very bullish on the Gap.
Although I don’t like Wal-Mart (NYSE: WMT), the children featured in their ads look like they stepped out of a Norman Rockwell illustration. Wal-Mart has combined large size with a hometown feel that’s reflected in a great 52-week stock performance of 48.80%. The market cap is $252.2 billion against revenue of $455.8 billion. Analysts are bullish on Wal-Mart.
CEO Ron Johnson is committed to bringing JC Penney back to its former glory days and has instituted changes designed to make that happen. But he needs to take a very hard look at the ads the company runs to make sure that they don’t alienate the very shoppers he’s trying to bring in.
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