Challenger Brand JCPenney Mounts A Comeback

A few weeks ago, I saw an article in The Wall Street Journal that caught my eye for a number of reasons. The headline said “JCPenney’s CEO Is Done Chasing New Customers. ‘We Are Loving Those Who Love Us.’” That’s a bold statement for a 120-year-old company that filed for Chapter 11 just two years ago. But it’s also the statement of a Challenger Brand that understands how those chasing the category leaders have to go to battle. Now there’s word that the owners of JCP are offering to purchase archrival Kohl’s for $6.8 billion. 

As the CEO of the country’s leading challenger brand advertising agency and a 30-year resident of Dallas/Fort Worth, home to JCPenney’s headquarters, I want them to succeed. What remains to be seen is whether what the new JCPenney says is congruent with what it does. I hope it is. It’s the only hope they have to survive.

When a leader becomes a challenger.

JCPenney is one of the legendary stories in retail. Originally founded as The Golden Rule by James Cash Penney in Kemmerer, Wyoming in 1902, the department store forerunner began selling textiles and sundries to those moving westward in the early 20th Century. Over time, Penney developed a reputation for selling quality clothing at affordable prices and, in 1913, the company was renamed for the founder.

Unlike countless others that tried and failed, JCPenney survived the Great Depression and two World Wars, hitting its stride in the 1970s with more than 1,600 locations across the country.

JCP became a retail giant anchoring shopping malls and building beautiful, free-standing stores throughout the country. For cost-conscious families across America, “Penney’s” was where you went to shop. Back to school. New jeans. A spring dress for a special occasion. JCPenney was it. And then it wasn’t.

By the early 21st Century, numerous issues, including increased competition, a decrease in mall traffic, the move to online retail, and a failure to stay current, left the retail giant hemorrhaging cash. When COVID-19 hit, it was simply too much to handle. To borrow Hemingway’s language from The Sun Also Rises, “How did they go bankrupt?” “Two ways… gradually. Then suddenly.”

From Chapter 11 to a new chapter.

In May 2020, after more than 100 years in business, JCPenney filed for bankruptcy protection. But to everyone’s delight, the company moved out of bankruptcy just four months later, agreeing to be purchased by Brookfield Asset Management and Simon Property Group for $800 million in cash and debt. Now a little more than a year later, JCPenney has new leadership from CEO Marc Rosen. His vision? To take care of the retailer’s true-blue, middle-class customers. Smart.

Rosen understands the brand can’t be all things to all people. But with the right guidance, for those who love it, JCPenney can be a lighthouse brand for those who want to look great in quality apparel without paying a fortune. They’re a challenger brand poised to make a great comeback. The question is how they’ll do it.

Challenger brands have to be brave. In their new creative, JCPenney can’t afford to get lost in the sea of sameness that plagues most brands in the retail category. Consider the campaigns from Kohl’s, Ross, Macy’s, Belk, TJ Maxx, Burlington, Marshalls. Anything stick out to you? Can you remember anything distinctive from any of those brands? Off the top of your head, I’m betting not. Even after watching these recent spots for spring, there’s little that differentiates one brand from another. That’s great for JCPenney. But only if they take advantage of it.

The big opportunity.

I like Rosen’s commitment to “loving those who love us.” Frankly, I think it’s both the path of least resistance and the quickest way the brand can get some traction after dropping out of many consumers’ consideration set. Unfortunately, I’m not sure their new “Shopping is back” campaign is distinctive enough. In one spot, a montage of highly diverse women dances their way through two dozen dresses with the end line “dresses are back.” In another spot, men, women, and kids show off new denim offerings with a “denim is back” closer. All of this is buoyed by a companion campaign featuring SNL alum Melissa Villaseñor singing Happy Birthday for JCP’s 120th birthday, and running through the store announcing, “shopping is back.” Here’s the problem – shopping never went anywhere. And neither did dresses or denim. It was JCPenney’s customers who went elsewhere – because they had to.

JCPenney has a fantastic opportunity to reinvent themselves. That’s something most brands never get the chance to do. JCP has a chance to come out of the gate with something fresh and completely different for the retail category. It’s not enough to simply say “we’re back.” Even to hardcore fans, that lacks any real excitement or significant pull toward the brand. Successful challenger brands have to forget what they know in favor of reinvention. They have to take thought leadership over their category and figure out where to sacrifice and overcommit. They have to focus on big ideas not chasing customers. For the better part of a century, that’s what JCPenney did. As a lifelong fan, I hope it’s something they’ll do again.

MIKE SULLIVAN is president and CEO at LOOMIS, the country’s leading challenger brand advertising agency and a top Dallas advertising agency for digital, social, mobile and user experience. For more about challenger branding, advertising, and marketing, leadership, culture, and other inspirations that will drive your success, visit our blog BARK! The Voice of the Underdog and catch up on all of our posts.

For more about LOOMIS, or to discuss how we can help your company succeed, CLICK HERE