Things have been looking bleak for JCPenney. The struggling retailer lost $147 million during the second quarter, its shares are down 18% so far this year, and some of CEO Ron Johnson’s recent efforts to resurrect the brand (including a pricing overhaul that replaced coupons and sales with a confusing three-tiered pricing structure) have fallen flat. However, it seems that Johnson had a moment of shear genius in offering free back-to-school haircuts for children during the month of August (painful pun intended).
In fact, the company saw such an influx of shaggy-headed kids in need of a new ‘do that it ended up giving away about 1.6 million haircuts in a single month — substantially more than it had bargained for. Johnson himself admitted the promotion was “far bigger than I expected,” and he has therefore imposed a few new stipulations to prevent the newly reorganized stores from being demolished by a cascading wave of hair clippings when the promotion relaunches. Beginning in November, children may still get their free haircuts, but only on Sundays, and only if they are in Kindergarten through grade 6.
While the hair-cut promotion is undeniably getting people in the door, many wonder whether it will have any real impact on the store’s anemic bottom line.
In other words: Are the parents of said shaggy kids likely to purchase something while in the store, or are they just taking advantage of the free grooming and then going along their merry ways? It would seem Johnson is confident enough in the former scenario to keep it going. Luckily, should the latter prove more accurate, this promotion isn’t the only leg Johnson has to stand on; his plan to create specialized shops dedicated to specific brands within the department store is well underway, and he hopes to do away with checkout counters in favor of self and mobile checkout options by 2014.
Only time will tell whether Johnson can work the magic that JCPenney needed from the man behind the Apple retail explosion. In the meantime, it seems there really is such a thing as a free