J.C. Penney’s New ‘Controversial’ Ads are Great for Publicity

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J.C. Penney’s New ‘Controversial’ Ads are Great for Publicity
By J.C. Penney (Brand New design website See article here) [Public domain], via Wikimedia Commons

J.C. Penney's New 'Controversial' Ads are Great for Publicity

Now, before we get into this more on J.C. Penney Company, Inc. (NYSE:JCP), here is where I am coming from so we can avoid the usual instant stereotyping of the author in any piece involving controversial topics. I am a Conservative Republican. I go to our town’s Catholic Church, I believe in God, am very happily married to an incredible woman, and have 4 amazing kids. Also, I could give a rat’s ass who you fall in love with or want to marry (as long as its not a child). I just don’t care…..really. There are enough legitimate things to occupy my thoughts and time and who person “x” is sleeping with, well…………just doesn’t make the list. I could stand for a lot less of people telling me how I am supposed to think about the topic and really could stand for a lot less of schools telling kids how to think. I’m the parent, I’ll raise my kids thanks how about you just focus on the math/science/reading stuff?  But, that is a topic for another day.

So that is where I am coming from and I hope I just eliminated 1/2 of typical comments one could expect when penning a piece like this.

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I am sure you have seen it by now. ……….

Capture547 JCPennys Free Advertising.........Thanks to the One Million Moms

That was preceded by this ad:

Capture548 421x420 JCPennys Free Advertising.........Thanks to the One Million Moms

This of course was all preceded by the hiring of Ellen Degeneres that immediately sparked an outcry from the “One Million Mom’s” who called for a boycott on JCP. There are other group’s out there but the Mom’s are the most vocal.

J.C. Penney Company, Inc. (NYSE:JCP) stuck to their guns and Ellen commented:

One Million Mom’s eventually realized that people like Ellen and dropped the whole thing but keep attacking new ads

What are these group’s accomplishing? Nothing really except for giving JCP tons of free ad time and keeping them in the general conversation among American’s. Which is, of course, exactly what a retailer in the midst of a turnaround would love to see happen.

See, if you believe the polls, most people support gay marriage which is another way of saying they aren’t hung up on homosexuality. Of course when we look at the poll below it does not give us a full picture of people who may be against gay marriage but have no issues with gay people themselves (ie seeing gay people in an ad would not turn them away from a retailer). I would bet that would trend the percentage materially higher in the “pro” camp.

Capture549 JCPennys Free Advertising.........Thanks to the One Million Moms

If you are one who is prone to think all polls are fixed to achieve a predetermined outcome then we can look to primetime TV for some evidence. ABC’s “Modern Family” which prominently sports a gay couple (with children) is now TV’s #1 show even crushing American Idol’s ratings.  If most of America were offended/frightened/repulsed/confused by homosexuality that just could not happen. Truth is people are people and most of us just don’t care about that stuff……..really, we don’t.

Now, before we start blaming/crediting the occupant of 1600 Pennsylvania Ave for any of this we need to remember that Obama was anti gay marriage until polls told him America wasn’t, onlt then did he come out for it. We really don’t what he truly thinks about it (nor do I care) but we do know he is “wicked awesome” at reading a poll.

As a shareholder of JCP I’d like to thank the One Million Mom’s and the other similarly inclined groups for the constant mentions they are giving JCP.  The free ad time is priceless and since a clear majority of America does not share your views, you are doing JCP a favor. I have read/watched commentary on it on every major network, their websites, hundred of blogs, cable news networks etc etc etc. The exposure really is amazing and your repeated proclamations on it are ensuring it won’t go away anytime soon.  Is there anyone out there who has NOT heard of the “controversy” and because of it then seen the ads? Anyone? Anyone? Bueller?

Now those group’s might point to JCP’s lousy 1st Q results and claim victory in their efforts. That would be a mistake. Those results were due to a new pricing strategy with below average merchandise (new CEO Ron Johnson’s merchandise won’t start showing up until later this summer/fall).   Results will improve from here and cut short any victory laps they may be doing.  In fact, I would argue that without all the free ad time JCP was afforded due to all this results very well may have been worse……so again, thanks.

Clearly I think the JCP turnaround will happen as I own shares. Time will tell if that plays out or not. One thing I am relatively sure of is that choosing Ellen as a spokesperson or having same sex couples in ads will not be their undoing……the free airtime the “controversy” generates can only help once Johnson upgrades the stores and the merchandise.

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Todd Sullivan is a Massachusetts-based value investor and a General Partner in Rand Strategic Partners. He looks for investments he believes are selling for a discount to their intrinsic value given their current situation and future prospects. He holds them until that value is realized or the fundamentals change in a way that no longer support his thesis. His blog features his various ideas and commentary and he updates readers on their progress in a timely fashion. His commentary has been seen in the online versions of the Wall St. Journal, New York Times, CNN Money, Business Week, Crain’s NY, Kiplingers and other publications. He has also appeared on Fox Business News & Fox News and is a RealMoney.com contributor. His commentary on Starbucks during 2008 was recently quoted by its Founder Howard Schultz in his recent book “Onward”. In 2011 he was asked to present an investment idea at Bill Ackman’s “Harbor Investment Conference”.

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