J.C. Penney has a lot to prove this back-to-school season

Maria Halkias / The Dallas Morning News /


Published Jul 20, 2013 at 05:00AM / Updated Nov 19, 2013 at 12:31AM

PLANO, Texas — J.C. Penney’s turnaround is about to be tested as parents decide where they’re going for back-to-school shopping.

The Plano-based department store chain always needs to score high during the fall apparel season, which is second only to Christmas in sales. But this year will be an even bigger test.

“Do they have a lot to prove to investors the next couple of months? Absolutely,” said Maxim Group retail analyst Rick Snyder. “Back-to-school performance is extremely important for Penney this year.”

Investors are looking for sales gains, an increase in store traffic, less cash burned and improved margins, he said.

This time last year, CEO Ron Johnson — ousted in April — got a lot of attention by offering free haircuts for students, but the promotion didn’t drive sales.

“This year, we’re charging $10 for kids’ haircuts. That’s still a good price,” said Betsy Schumacher, Penney’s senior vice president over children’s merchandise.

If free haircuts had worked, the company would have offered them again, she said. Last year, sales declined 22 percent in the second quarter and 27 percent in the third quarter, periods that include the key back-to-school months of July, August and September.

This August, Penney is offering $25 prescription eyeglasses for kids 16 and under. It’s also giving away personalization kits with purchases of shoes and backpacks.