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JCPenney Is Predicted To Vanish In 2013 By People Who Are Truly Awful At Predictions

Written by Frank Hayes
January 2nd, 2013

It’s New Year’s, which means prediction time—and JCPenney, Talbots and Pacific Sunwear are “Brands That Will Disappear in 2013,” according to investment blog 24/7 Wall St. This should send a chill down the collective spines of these chains–except that these prognosticators have a lousy history of guessing which retailers will disappear. For example, in 2011 and 2012, Sears, American Apparel, A&W Restaurants, RadioShack, Zales and Blockbuster were all supposed to vanish. They’re all still around.

The last time these Wall Street guys almost accurately picked a vanishing retail brand was Borders. It turns out that E-Commerce makes even the most zombie-like retail names harder to kill. But that’s not the only thing involved.

To be clear, 24/7 Wall St. has a really loose definition of a brand “vanishing”—this year’s list of predictions also includes Avon, American Airlines, BlackBerry maker Research In Motion, online magazine Salon.com, print magazine Martha Stewart Living, Mitsubishi’s North American automobile operations, plus the Oakland Raiders football team, any of which would “vanish” through a merger, acquisition or, in the case of the football team, moving back to Los Angeles.

In the past, the blog bragged that it correctly predicted the vanishing of A&W (Yum Brands sold it, but the chain is still running) and T-Mobile (AT&T tried to buy the smaller carrier, but the deal didn’t happen and T-Mobile’s nameplate is still around). Note: The blog actually does claim the brands will disappear, but it counts a correct prediction if there’s a buyout that preserves the brand. Go figure.

Among many other “vanished” brands that are still around (Reader’s Digest, BP, Merrill Lynch, Sony Pictures, MySpace, Nokia), the blog also blew the call on Kellogg’s Corn Pops—instead of killing the brand, Kellogg’s actually extended it by adding Cinnamon Corn Pops. Never mind the fact that, by our count, these guys are 2-for-20 over the past two years. When you reach all the way down to individual Kellogg’s cereal brands and still can’t get it right, you’ve got prognostication problems.

But retailer brands are especially hard to kill. Yes, JCPenney is an easy call for a retail-chain dead pool, and Talbots and Pacific Sunwear are in financial trouble. But brick-and-mortar brands often have so much real estate (we’re looking at you, Sears) and so much customer affection (customers haven’t just stopped buying at JCPenney, they’ve gotten furious about the changes) that it takes a lot to put them out of their misery. It’s cheaper for a buyer to roll a new store concept under that famous brand, at least for a while.

Then there’s the loyalty-program CRM cache, which turns out to be much harder for a competitor to make use of after that competitor swallows the chain or just buys the data at a bankruptcy auction. Yes, the CRM data is all there. But the actual customer loyalty is still with the old brand. Barnes & Noble bought Borders’ customer data, but it hasn’t succeeded in getting all those customers to love B&N.

Maybe Borders is the exception—a troubled brick-and-mortar brand that had too much floor space, a dying product, decrepit IT and the world’s most powerful direct E-Commerce competitor. Trim off just one of those problems and you’ve got Best Buy, which isn’t dead yet, even though people who have nothing to do with retail call it a chain of showrooms for Amazon.

Which brings us around to the real reason we’re suspicious of these lists: How the heck can anyone make a retailer dead-pool list for 2013 and not include Best Buy and Barnes & Noble stores?


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4 Comments | Read JCPenney Is Predicted To Vanish In 2013 By People Who Are Truly Awful At Predictions

  1. Lori Says:

    They maybe awful but when most days there are more employees than customers, you can’t stick around forever. But even if they are bad, there have been tons of other sites saying the same thing for quite a while. That we’re hanging on by the skin of our teeth

  2. Marie Says:

    Penney’s should fall by the wayside! The products that they now carry are of worse quality than K Mart. Lots of luck finding ANYTHING made in this country. They are catering to the 20-35 year olds and not caring about all of us ‘oldsters’ that built them up in the first place. Ron Johnson needs to go back to where he came from, his ’boutique shops’ concept is a joke. Why in the world would I want ‘shops’ within a store that is located in a mall? If I want a particular shop, then I’ll step outside of Penney’s doors and go to that shop in the mall.

  3. Paul Says:

    There is nothing machiavellian going on here with either Ron Johnson or jcp. Change retailing, fight and don’t give up jcp.

    “It must be considered that there is nothing more difficult to carry out, nor more doubtful of success, nor more dangerous to handle, than to initiate a new order of things. For the reformer has enemies in all those who profit by the old order, and only lukewarm defenders in all those who would profit by the new order, this lukewarmness arising partly from fear of their adversaries, who have the laws in their favour; and partly from the incredulity of mankind, who do not truly believe in anything new until they have had the actual experience of it.”

  4. Mick Says:

    Marie, tell me how many nationwide retailers exist that sell mainly USA-made products? No, you won’t find much in JCP (although they have made it a point to start carrying more). However, I guarantee you will find just as little at Kohls, Macy’s and definetely not much at Walmart.

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