JCPenney: Bankrupt by Labor Day?

For a while now JCPenney has been revamping itself. The idea of affordable cost for fashion forward clothing has been what everyone is hearing about. Ellen DeGeneres even got behind the campaign with advertisements that appeal to younger generations.

According to Yahoo! Finance, the now-resigned CEO in charge of this revamp, Ron Johnson, got the company in trouble. JCPenney announced on April 8, 2013 that Johnson would be leaving, effective immediately.

Now the company is at a really important crossroads. Johnson's new target market completely disengaged JCPenney's previous customers. About 500 of the the companies stores were revamped to support this new target market while the rest got remodeled. Johnson also let go 19,000 employees during his time with the company.

On top of all of this, second-quarter sales of 2012 dropped 21.7percent in stores that have been open over a year.

To complete all of these tasks, Johnson was spending a lot of money. JCPenney already wasn't in great condition and he was spending what they had. Now he has left and the job is half done, with the actual target market of the company unknown and no real solid direction to go in.

Myron Ullman is taking over as CEO, but if he can't get an idea that can create some revenue, the company could be bankrupt by Labor Day.

Future Plans

It sounds like the company would ideally like to go back to before the revamp. However, half of the work has already been into the new idea so re-remodeling the stores would cost as much money as what they spent before.

JCPenney could fully devote itself to this new idea and do what they can do to make it work, but sales have already proven this isn't working as well as they hoped.

Overall Effects

Being a big department store, JCPenney has had big impact in the clothing world over the years. I know when they put in a JCPenney store by our movie theater in Colorado Springs everyone was ecstatic. It will be interesting to see what the company does to pull out of this.

If they do have to close, the niche will be readily available for whoever has ideas and the drive to pick it up.