Traditional Retail Clothing Stores

This announcement followed the lay off of 1,250 employees inside Fall of 1997. The cutbacks are designed to save the company $50 million in 1998 and $105 million in 1999 in the closure of under-performing retail stores (Fairbank, 1998).

The J.C. Penney Business operates 1,200 J.C. Penney stores. In recent years, the business has been closing 20-to-25 stores per year, even though opening approximately 12-to-15 new stores every year (Fairbank, 1998).

While the J.C. Penney Company posted powerful sales performance in the Spring-quarter of 1998, sales during the Summer-quarter of 1998 had been below expectations. The business reported that same-store sales, or sales at stores open at least 1 year, declined 2.1 percent in June inside comparable period in 1997, and that total sales declined 2.6 percent from a the comparable quarter in 1997 ("Retailer Says June Sales Slide Will Result in Revenue to Fall Short of Expectations," 1998).

The difficulty for your J.C. Penney store in the Southland Mall in Houma, Louisiana is that sales levels aren't growing at the rate which is needed to assure how the store will remain open, as the parent J.C. Penney Business is actively closing under-performing stores. Though the Southland Mall store just isn't under-performing, sales levels aren't sufficiently powerful to assure its continued operation over the long-term.

With respect to the solution factors that influence decisions about in which to shop for clothing, the J.C. Penney Southland Mall Store fared well in relation to competitors located inside the Houma metropolitan Area, but fared poorly against competitors located each from the New Orleans area and the Baton Rouge area. The benefits of this analysis are illustrated in Chart 1, which can be found over a following page.

In relation to product or service factors, however, the management at the J.C. Penney Southland Mall Store should be able to devise and implement strategies that effectively address all client concerns (Rust, Zahorik, & Keiningham, 1995). Product quality, style, and alternative need not be dependent upon geographic location.

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