JCPenney fell on hard times over a decade ago. Once one of America’s largest retailers, it remains among the oldest, as it was founded in 1902 in Wyoming. Today, it is part of the American landscape of decimated, once-huge retailers, which include Sears and Kmart. As the holiday season moves toward its close, JCPenney has only 667 stores left. Like other retailers whose businesses have weakened significantly in recent years, 2022 will make or break them.
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JCPenney may have too few stores to survive into next year. A retailer’s footprint is important. It is hard to make sales when people must go a long distance to shop. One of Walmart’s significant advantages is its 4,662 locations. Walmart management says that 90% of the American population lives within 20 miles of one of its locations.
JCPenney also has a broken brand. Many consumers do not know it exists anymore. Some who do know it only remember a past rocked by calamities. It is difficult for a retailer to draw customers when all they know about is its demise.
JCPenney falls into a category of retailers who will struggle to survive into next year, at least in their current forms. Bed Bath & Beyond is one of these. It is a latter-day JCPenney. Once a wildly popular shopper destination, it is burdened by debt (which JCPenney has very little of today), inventory problems caused by balance sheet weakness, too little money to do proper marketing and what must be small traffic to its e-commerce operation.
Gap is another retailer with deep problems. It may be the “next JCPenney” if it cannot pull out of the nosedive that has hurt sales, especially at its largest brand, Old Navy. Sales across all Gap brands continue to deteriorate, as they have for most of the past several years.
Will JCPenney make it financially? Probably not, if retail history is any lesson.
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