3/7/2013 7:08 PM ET|
J.C. Penney has a terrible week
The retailer reportedly lays off 2,200 as the stock price plunges and questions mount about the CEO.
It's hard to keep track of all the misfires surrounding the company right now. Thursday, news emerged that Penney had laid off 2,200 employees in its stores and corporate offices. The layoffs actually cheered investors up a bit: Penney's stock price was up more than 2% in afternoon trading.
Here's a list of the setbacks Penney and CEO Ron Johnson have suffered recently:
Analysts losing faith. There aren't many analysts left who remain bullish about the stock, and two high-profile ones pulled their support Wednesday. Analysts from Citigroup (C) and Oppenheimer cut their ratings to "neutral" from "buy."
Citi analysts said they "are less convinced that the course-correcting strategies being implemented around pricing and marketing will drive meaningful sales improvement," according to Barron's. Oppenheimer's Brian Nagel was bleaker, saying "near-term risks for JCP are severe and we believe turning more treacherous."
Board losing faith. The board of directors is considering selling Penney or replacing CEO Ron Johnson. Former Penney CEO Allen Questrom is adding fuel to the fire, saying that CEO Johnson should be replaced. ""The board has to take action," Questrom told CNBC. "They can't be delusional like Ron Johnson is."
Investors losing faith. The stock price plunged 17% in the last three days before seeing a pickup Thursday.
Legal troubles. A nasty trial involving Macy's (M) and Martha Stewart Living Omnimedia (MSO) is dragging all three companies' reputations through the mud. "Does anyone win in the Martha Stewart trial?" asks Will Ashworth of InvestorPlace. The answer is no.
Low employee morale. The workforce hasn't exactly been cheering at Penney, and this week's layoffs aren't helping much, either. Morale was so bad at the company last year that employees at the home office were watching an estimated 52 YouTube videos a day. About 300 workers at corporate headquarters lost their jobs last month, The New York Post reported.
Insiders selling shares. Board member Steven Roth isn't talking publicly about the company's troubles, but you can guess his feelings by looking at his stock sales. Roth sold 10 million shares of Penney stock on Tuesday, according to The Dallas Morning News. Given that J.C. Penney shares have already plummeted some 60% in the past year, that's as close to a vote of no confidence as you can get.
J.C.Penney should go back and look at the top quality stores they were running some 50 years ago.
There were great products for everyone. It was like going to a Super Mall, only under one roof,
with one name J.C.Penney. I always found quality goods for varying prices, for varying types of customers.
To me it was a Company styled to fit middle and upper middle class buyers.
Now walk into one of their newly opened stores (Union Gap, Washington). It is a stripped down,
understocked, no eye catching window dressing, cold and un- appealing store in which to shop.
The Old Penneys stores should be the New Penneys stores. Please re-evaluate your marketing strategies before it is to late. Would hate to see you go!
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