- JCPenney CEO Jill Soltau said during a call with investors on Thursday that resolving the retailer’s high inventory levels was one of her most immediate priorities.
- The department store reported its third-quarter earnings results on Thursday. Inventory levels were down 5.4% versus the same time the year before.
- On a recent visit to a JCPenney store in New York, we were overwhelmed by the massive amount of inventory on display.
In a call with investors on Thursday morning, JCPenney‘s new CEO, Jill Soltau, was asked by an analyst what she felt should be improved in its stores based on her early experiences.
Soltau, who was appointed to the position just over a month ago, was reticent to make any solid commitments just yet, save one: inventory management.
“I do see us as over assorted, and certainly we have had high inventory levels,” she said.
Reducing inventory levels is now front and center of Soltau’s strategy for the future. On Thursday, the retailer reported that inventory levels at the end of the third quarter were $3.22 billion, down 5.4% versus this time last year. Same-store sales numbers were also down 5.4%.
“In spite of our overall sales results, I am encouraged by the recent underlying trends in key businesses such as women’s apparel, active, special sizes and fine jewelry. We are making progress and taking the necessary steps to right-size our inventory positions to better support the brands and categories that are demonstrating profitable sales growth,” Soltau said in a press release on Thursday.
During a visit to one of JCPenney’s New York stores in May, Business Insider was overwhelmed by the amount of inventory on display. Each department was brimming with racks of clothing, swimwear, toys, and accessories that were so tightly packed together that it made it impossible for any brand to really stand out.
Read more: We visited JCPenney a day after its CEO resigned abruptly and were overwhelmed by what we found
These sentiments have been echoed by analysts, who say its bloated and confusing assortment is turning off shoppers.
“Clothing at JCPenney has become a hotchpotch of randomness brought about by a constantly shifting view of who the chain should target,” Neil Saunders, managing director of GlobalData Retail, wrote in a note to clients on Thursday. “This has left customers both confused and unimpressed. Satisfaction scores for apparel shopping have plummeted over recent years and customers have defected as a result.”
And now, according to Saunders, some of JCPenney’s better brands are being lost in the mayhem.
“In our view, Peyton and Parker is nicely designed and curated, but the effect is lost in most stores and on JCPenney’s website where the label gets completely drowned in a sea of merchandise and general clutter,” Saunders wrote.
SEE ALSO: Retail experts warn that JCPenney’s new CEO may not be able to fix the company’s massive problems