JC Penney slumps after posting sales drop

JC Penney is reporting its worst percentage drop in 24 years, with CNBC's Brian Sullivan and Amanda Drury. Jan Rogers Kniffen, J. Rogers Kniffen Worldwide founder, discusses re-invigorating the customer to turn the stock around.

By Roland Jones

Shares of retailer J.C. Penney (JCP) are down 18 percent to $27 Wednesday, one day after the department store owner scrapped its dividend and showed its effort to remake itself as an affordable fashion-oriented retail chain took a much bigger-than-expected toll on sales in the first quarter.

The retailer?s shares suffered their steepest decline since the 1987 stock market crash.

J.P. Morgan, Citigroup and Goldman Sachs have all lowered their price targets on J.C. Penney, which is in the process of a multi-year turnaround, revamping everything from its pricing strategy to remodeling its stores.

The retailer said sales at stores open at least a year fell 18.9 percent in the first quarter, and reported a loss, missing Wall Street estimates on both counts by a wide margin.

In February, the retailer began to eliminate hundreds of sales events in favor of "everyday low" prices on most items, a radical departure that analysts predicted would confuse or alienate its customers.

The next phase of the transformation will come to shoppers in August when the first of the 100 boutiques each store will house are unveiled. At Tuesday's analyst meeting, Penney announced deals with designers like Vivienne Tam, Betsey Johnson and Michael Graves.

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Reuters contributed to this report.

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