Nov. 20 - Struggling retailer J.C. Penney said it's ''encouraged'' by business so far this month, and it sees higher comparable store sales in the current holiday quarter. Fred Katayama reports.
J.C. Penney's loss widened in the third quarter. But there were signs of progress in the struggling retailer's attempt to turn itself around. Its comparable sales rose last month, and CEO Mike Ullman says he was "encouraged" by what he sees this month. And while those sales fell for the quarter, they did so at a slower rate. Under Ullman, Penney returned to its promotional pricing strategy after the disastrous move by his predecessor, Ron Johnson, to wean the retailer away from discounts. But promotions cut into gross margins. And discounting is the problem that got them into trouble in the first place. Morningstar analyst Paul Swindand: (SOUNDBITE) PAUL SWINDAND, ANALYST, MORNINGSTAR, (ENGLISH) SAYING: "One of the problems that the whole mall department store channel has right now is that the customer hasn't been visiting the mall often enough. The customer hasn't been visiting J.C. Penney often enough. Now, the new strategy that Ullman is undertaking, is to promote more, to excite the customer into coming out and visiting the store." But Ullman insists Penney has regained momentum. He expects comp sales and gross margins to improve in the current quarter. J.C. Penney's stock, which has fallen 34 percent since its miserable second quarter results, bounced back sharply at the market open.