Aside from outlining tweaks to his plan, Johnson on Friday touted the early success of the 10 mini shops that Penney has rolled out in some of its stores.
The company said so far that it has converted about 11 percent of the floor space to these shops and that area has on average generated $269 per square foot — or more than double the revenue per square foot in the rest of the store. Penney plans to bring in more mini-shops featuring Martha Stewart, Michael Graves and others next spring.
In total, the company plans to add 100 shops inside each of 700 stores by 2015. Penney's remaining 400 stores are in small towns and won't feature the full makeover. Surrounding those shops will be extra-wide aisles that Johnson calls "streets." Along those pathways will be ice cream and coffee bars and wood tables with built-in iPad tablet computers shoppers can use. In the middle of it all, a Town Square will offer activities like Pilates.
Ultimately, analysts say that the success of Penney will depend on whether the company can make its stores fun places to shop. But the retailer has a long way to go toward revamping its business.
Penney, based in Plano, Texas, said it lost 56 cents per share, or $123 million in the quarter ended Oct. 27. That compares with a loss of $143 million, or 67 cents per share, in the year-ago period when results were dragged down by costs related to the management transition and a voluntary retirement program. Revenue dropped 26.6 percent to $2.93 billion in the quarter. Analysts had expected a loss of 15 cents a share on revenue of $3.27 billion.
On the news, Penney stock fell 5 percent, or $1.05, on Friday to close at $20.64. Investors, who initially sent Penney stock soaring 24 percent to about $43 after the company announced the pricing plan in late January, have pushed the stock down by more than 40 percent since the beginning of the year.
Sozzi, the analyst at NBG Productions, said even if investors — and Penney's board — are worried, they'll likely give Johnson more time to see if his strategy will work. After all, he said, the company is beginning to see some results in the mini-shops.
"The parts of the store that he has touched are working," he said. "There's still hope priced in the stock."
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