JC Penney (NYSE:JCP) is showing some encouraging signs of a pulse. While Q3 was expected to look ugly, Oct same store sales were up. JCP hasn’t seen up for a long time. The market is excited.
One of the categories doing well has been jewelry. The price of gold is off and it looks like JC Penney has not been caught with olde over priced stock. The question becomes does the value conscious shopper keep buying jewelry when the price of gold goes up? What will happen to the category? Price elasticity will skewer the shopper. Will this negatively impact same store sales in the future.
JC Penney does not compete with Tiffany’s (NYSE:TIF) or other high-end jewelers. But it will need to engage and retain their fleeting customer base. Disappointments will not work.
George Gutowski writes from a caveat emptor perspective.