Zacks Industry Outlook Highlights: J. C. Penney, Build-A-Bear Workshop and Apple

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Nov 23, 2012, 09:30 ET

CHICAGO, Nov. 23, 2012 /PRNewswire/ -- Today, Zacks Equity Research discusses the U.S. Retail, including J. C. Penney Co. Inc. (NYSE:JCP), Build-A-Bear Workshop Inc. (NYSE:BBW) and Apple Inc (Nasdaq:AAPL).

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A synopsis of today's Industry Outlook is presented below. The full article can be read at

Link: http://www.zacks.com/stock/news/87304/retail-industry-stock-outlook-nov-2012

Uncertain and sluggish economic conditions continue to weigh upon the retailers, indicating a grim outlook in terms of profitability and consequent growth. However, continuous efforts on their part to offer innovative products and value pricing have been paying off in an economy which is still in the doldrums. It is still a tough time for retailers, who are using all their resources in order to combat the sluggishness.

According to the U.S. Census Bureau, the U.S. retail and food services sales declined 0.3% from the prior month sales to $411.6 billion in October.

The "Re" is Back in Retailing

'Transformation' is the new mantra for the retailers. Despite rapid technological advancements, which are influencing consumer behavior, the retail industry continues to reinvent, redesign and revitalize its physical store formats to maintain their dominance.

Of late, retail giants including Best Buy Co. Inc., Target Corp., J. C. Penney Co. Inc. (NYSE:JCP) and Build-A-Bear Workshop Inc. (NYSE:BBW) are focused on revisiting and re-evaluating conventionality and traditional business traits, while also envisioning its brick-and-mortar store merchandise offerings. Additionally, these companies continue to actively re-engineer and re-tool various systems and processes.

Moreover, the retail groups are coming up with strategic initiatives to boost operating efficiencies, drive growth and enhance shareholder's value. Most retailers are focusing on abridging costs drastically to ensure competent operating channels. We believe that such measures are necessary to gain competitive advantage over peers. However, focus on improving the top line should be prioritized to accelerate long-term growth.

The above mentioned traits are evident from the efforts of J. C. Penney, which has left no stone unturned to bring the company back on the growth trajectory. Management has taken up everything from implementation of new pricing strategy, fresh logo and strategic merchandise and cost reduction initiatives, while enhancing the shopping experience of customers.

Moreover, the leading specialty retailer of consumer electronic products -- Best Buy intends to get rid of stores that are not contributing to its growth, while modifying others are also on the cards. The company plans to transform its big-box format to a big profit center by redesigning its prototype stores to mimic Apple Inc's (Nasdaq:AAPL) retail store format.

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