JC Penny reported today that "fiscal second-quarter net
income rose 1.7%" but the retailer said Thursday "it expects the bulk of its
second-half profit will come later than expected", stoking worries about fierce
competition among department stores this fall. So is Kevin Roberts’ "Lovemarks" working or not?
One of the analysts following the industry indicated that both Penny’s and Kohls’ have been "stealing customers" from Macy’s by offering discounted merchandise. He went on to say "we’ve got a market-share battle brewing among the department stores which will make the next several months most interesting".
So what drove Penny’s increase in net income – "Lovemarks" or price discounting? And what will allow them to weather the brewing market share battle? Could the cash going into Lovemarking be put to better use on street level promotions? Next couple of months will tell…
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