J.C. Penney Company (NYSE:JCP) is a retailer and that means the most important part of the year is the holiday season. For this particular retailer, holiday season 2013 may be the most important of all time. J.C. Penney has had a rough couple of years and the company hasn’t shown much sign of recovery.
A new report from Deutsche Bank takes a look at the retail sector in the lead up to the holiday season. The report rated J.C. Penney Company (NYSE:JCP) at Hold. The report noted the price investment in J.C. Penney sales which are incredibly important to the company’s long-term and short-term future, as well as the intricacies of valuing a company in transformation.
J.C. Penney holiday season
The month of October is right around the corner. The start of the fourth quarter will see retailers increase staff hours and opening times in order to deal with the increase in volumes in advance of Christmas and Thanksgiving shopping. J.C. Penney Company (NYSE:JCP) followed a strategy of cutting customer volume under Bill Ackman. That’s why this holiday season is so important.
J.C. Penney Company (NYSE:JCP) doesn’t need to sell aggressively in order to demonstrate that it can still bring in consumers. It needs to sell aggressively in order to show those consumers that it is still there. Bill Ackman tried to pull J.C. Penney Company (NYSE:JCP) away from bargains. The company needs to embrace them once more.
This holiday season is important in more than monetary terms for J.C. Penney Company (NYSE:JCP). Christmas is when most consumers think about shopping. J.C. Penney wants those consumers thinking about its store and all the deals it has on offer. The DB analysts were impressed by the aggressiveness of the sales through September, but it’s clear there’s more to be done.
J.C. Penney transformation
J.C. Penney Company (NYSE:JCP) is not priced like an average retailer according to the Deutsche Bank analysis. The company is valued at a resurrection premium. Investors are willing to pay more for J.C. Penney Company (NYSE:JCP) shares than they are worth in terms of cash and prospects. Those investors believe the company is able to turn itself around.
The wider market is not so sure. J.C. Penney Company (NYSE:JCP) shares have lost more than 20 percent of their value in the last three months. On today’s market the stock was down by just over 1 percent.