JCPenney stock falls below $1
The clothing store's shares are now a penny stock.
JCPenney stock is now just worth pennies. The retailer’s shares have fallen below $1. The clothing chain’s stock is the lowest in almost 90 years.
How JC Penney fell so far
JCPenney has existed since 1908 but hasn’t been profitable since 2010. The store’s troubles are a sign of the troubles retailers are having in the age of Amazon. Sales have declined 5% over the course of 2018. The chain is also $4 billion in debt and has reported a $151 million loss in its third quarter (Q3) earnings report. Even with a new chief executive officer, (CEO), Jill Soltau, and clothing lines from former basketball star, Shaquille O’Neal, the business lost money and closed hundreds of locations.
Many financial experts believe the retailer made mistakes made by former CEO, Ron Johnson. His ideas backfired, including briefly ending the popular coupons that customers used. JCPenney also ignored their loyal baby-boomer middle-income consumer base by raising prices and trying to lure in younger and wealthier shoppers. All these changes drove potential buyers away to rivals like TJMaxx. With purchasers leaving and a dwindling cash reserve to improve existing stores, the chain’s stock has fallen to a record low.
Grim prognosis for JCPenney
Retail experts are pessimistic about the store’s future. Mark Cohen, former CEO of Sears Canada, doesn’t see JCPenney recovering from its latest economic troubles.
‘JCPenney is nowhere. A retailer who's nowhere is dead because the business is always hyper-competitive and typically a zero-sum game,’ said Cohen.
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