JCPenny Says They are Sorrrwwy

It seems that JCPenny is going on a mea culpa tour and asking customers with hat-in-hand to come back to buy stuff from them again.

It only took a year and about $6 billion of lost sales to get here, but JCPenney (JCP) says it's learned its lesson. In a humbling new multi-media ad campaign, the Texas-based department store chain is openly admitting that it messed up when it revamped its stores, styles and sales promotions under the brief leadership of former CEO Ron Johnson.

As my co-host Jeff Macke and I discuss in the attached video, the mea culpa is remarkable on many fronts but it remains to be seen if the strategy works. It's a strategy that is more in line with its historic roots and formerly loyal customers rather than the younger, hipper shoppers it was aiming to attract, which is evident from the vintage storefront photos shown in the opening frames of the 30-second spot.

I think it just might work from what I can gather. America loves it when a company or celebrity admits they were wrong and try to make amends. A redemption story is very important in America for the most part. JCPenny took their customers for granted and tried to make the company into an Apple Store. That seemed like a good idea on the surface but deep down the people that shopped at JCPenny probably aren't the ones waiting in line to buy an IPad 4 on release date.

I would go long JCPenny if they weren't so damned mired in debt. They have billions in debt on their books and they need a turn things around and fast or they will be looking at closing stores to make up the difference. If they lose $500 million in a quarter again they will be circling the drain. I still think the company is a good value play because the guy that lost $6 billion (gasp!) in sales is now looking for work and an industry Vet is at the helm. You are pretty much putting your faith in the new CEO to turn things around or not.