J C Penney Inc (NYSE:JCP) has been facing financial constraints and other challenges. To regain its lost glory, it will move into the used-clothing business space. The business made the announcement on Thursday and will be partnering with online consignment store ThredUp Inc. An official working with J C Penneyexudes confidence that it will be a profitable deal.
The retailer’s business performance
The retailer had earlier on announced its second quarter results. It recorded a net loss of $48 million for the period. Nevertheless, it also experienced a 9.2% decrease in sales which was drastic compared to the previous quarter.
Analysts were quick to send out a warning to the company. They advised the retailer to act fast in order to save itself from even worse conditions.
Saunders advises on the way forward
The managing director of GlobalData Retail Neil Saunders opined, “When you have sales declines of almost 10% over the course of the year, you’ve got a very serious problem that needs to be very quickly addressed”.
Saunders admits that the Company is indeed shrinking considering the costs and the debts it has. He believes the reasons for the decline of the retailer are clear and area causing customers to migrate. The analyst describes the retailer’s stores as lacking ease, interest and energy. Saunders thinks these stores do not offer quite much in terms of compelling goods and services. They are not the kind of stores that most customers would find pleasant to shop in. Saunders reveals that quite a large number if customers have been avoiding them lately. He says that the trend may continue if something won’t be done about the matter in urgency.
The business collaboration with ThredUp
The retailers’ business collaboration with ThredUp may not result in a significant impact. However, Saunders admits that it is a step towards the right direction. He advises J C Penney asking it not to observe it as the solution to getting matters on track. According to the analyst, this collaboration is only an icing on the cake and should be seen as such.
Thirty of the retailer’s stores will soon start selling secondhand clothes. They will be doing this through partnership with a resale site that deals on stock brands from Gucci to Gap. The selections will rotate on a weekly basis. The purpose is to have the businesses give pleasant surprises to shoppers that frequent the stores.