Retailers, consumers and prices
JC Penney held its two-day analyst meeting in New York City this year, kicking off with a dinner and presentation by Chief Executive Myron “Mike” Ullman on Tuesday night.
The big news out of the meeting was that Penney’s time frame for its long-range growth plan has been stretched out due to the rough retail environment, and the retailer may further cut back on new store openings.
But there were some off-beat sites, sounds and observations from the meeting to make you feel like you were there (well … almost).
** After Ullman gave his speech on Tuesday night, he began to inform the crowd of the detailed logistics for how the analyst day would unfold on Wednesday, including telling them there would be boxed lunches on the bus that would take them to a store tour in Paramus, NJ. He then interrupted himself, joking that somebody else should be providing all the details. But upon further reflection he said: “I don’t know who it is who is going to tell you that– we probably eliminated that position.” The quip generated laughter from the crowd.
** Penney handed out a binder Wednesday morning filled with copies of the slide presentations that its management would be giving that morning. But to force impatient analysts (and reporters) to listen to all of those presentations, it omitted copies of the final key presentation — that of Chief Financial Officer Bob Cavanaugh. Penney knew that if it put copies of his slides in the binder, Wall Street analysts (and, well, us) would have dashed out of the room and rushed off to update their research notes (or file stories) – missing presentations on marketing, merchandising and customer satisfaction.
Check out the bridge, the elongation and the unpredictability at the J.C. Penney analyst meeting.
CEO Mike Ullman told analysts that he will not be providing annual financial guidance at this time because the department store operator does not have enough visibility.
On Tuesday he highlighted how uncertain the retail environment was.
”I’ve been in the business 39 years. I don’t think I’ve ever seen an environment that was as unpredictable as the current environment,” Ullman said.
The department store chain has been hit as its middle-income customers contend with higher food and energy costs, a deteriorating housing market and a credit crunch.
Ullman said the time frame for the company’s five-year growth plan has probably been “elongated” and that the company now has a “bridge” plan that includes moderating store openings and curbing the amount of inventory it keeps in stores.
Weakness in the retail industry has had one beneficial effect for consumers, though. Inflation at the consumer level rose less than expect due to falling apparel prices. Clothing retailers have been cutting prices to try to attract customers.
Also in the basket:
Coca-Cola profits beat estimates