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.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Live prices on most popular markets
You might be interested in…
Find out what charges your trades could incur with our transparent fee structure.
Discover why so many clients choose us, and what makes us a world-leading provider of spread betting and CFDs.
Stay on top of upcoming market-moving events with our customisable economic calendar.