NEW YORK -- J.C. Penney Co.'s new CEO Ron Johnson, a former Apple executive, told analysts Monday that the department store chain is rethinking everything it's doing -- from pricing to products. The message comes as the retailer struggles to turn around its business after reporting a quarterly loss.
Johnson's comments offer valuable insights into the next chapter for Penney's, which like many mid-priced retailers, has been hurt because its middle-income consumers have been especially hard hit by the challenges of the weak economy.
The chain has added such popular brands as European clothing line MNG by Mango and Sephora cosmetics, but still struggles to make its stores more inviting places to shop.
Johnson's address comes on the day the company reported a third-quarter net loss due to costs related to restructuring, its management transition and a voluntary retirement program. The company also gave a fourth-quarter outlook that was below Wall Street forecasts.
"I am working with our team to rethink, really to reimagine everything we do," said Johnson, who was with Apple for 11 years before taking the CEO helm from Myron Ullman III. "I am investing considerable energy in a strategic review of our product, our pricing and our promotional strategies in order to create an exceptional, a new, a better way for people to shop."
Johnson, who took over merchandising and marketing responsibilities Nov. 1 and will assume the remaining CEO functions Feb. 1, said he told employees on his first day of work that he was here to "transform," not to improve" the business.
Johnson and his revamped management team have a big task ahead of them.
Penney has closed stores and a call center and discontinued its catalog business, while its middle-class customers have cut back on spending as they face high unemployment and higher costs for household goods.
Penney's revenue at stores opened at least a year -- an indicator of a retailer's health -- fell 1.6 percent during the third quarter. That compares with increases of 4 percent at Macy's and 2.1 percent at Kohl's for the same period.
Penney said Monday that it lost $143 million for the three months ended Oct. 29 compared with net income of $44 million in the year-ago period. Revenue slipped almost 5 percent to $3.98 billion from $4.19 billion largely reflecting the discontinuation of its catalog and catalog outlet business.