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.

By Kim Peterson Mar 7, 2013 3:08PM
Shoppers at a J.C. Penney store in New York, NY on October 23, 2009 (Mark Lennihan/AP)Could things get any worse for J.C. Penney (JCP)? Nearly every day of the past week has brought fresh news about something going wrong at the struggling retailer.

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.

More on moneyNOW



81Comments
Mar 7, 2013 3:52PM
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Yes it's true. There new structure inside the store is awful. It looks half empty plus their clothing selections really sucks. We miss the old JC Penney.  I used to shop there all the time, now I just walk by. It's more taylored for the more mature.  Bring back all the selections you used to have!!!!
Mar 7, 2013 3:53PM
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They have to dump CEO Ron Johnson.   He made this mess, bring in someone to clean it up.
Mar 7, 2013 4:05PM
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J. c. Penney offers nothing for the tried and true customer that has been their backbone since it first opened.No more catalog, where I did all my christmas shopping, no more clothes for women like me. Just a slick flyer with clothes for people that they hope will shop there (the upscale, young , sophisticate) that is going to shop Saks anyway, not J.C. Penney. they got none of my money this whole year and customers like me were their bread and butter. So long, J.C. Penneys it was good while it lasted.

 

Mar 7, 2013 4:36PM
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Before, when I walked into JCPenney I could not believe the good buys I used to get. I would walk out with two shopping bags full  with a smile on my face because of the great bargains and quality. Now for the past two years I walk in and out empty handed because the clothing sucks and it is just too pricey. What happened to all the quality merchandise and bargains? That CEO should be fired and replaced by another who can bring back the old JCPenney and its loyal customers. It seems all Penney customers like myself are now going to Kohls and yes, I do find great bargains at Kohls. Kohls is affordable and they sure remind me of the old JCPenney. Overall I miss JCPenney because I was a loyal customer for years.
Mar 7, 2013 3:36PM
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Their clothes are awful and they're too expensive for the quality.
Mar 7, 2013 4:09PM
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Ron Johnson should have been replaced months ago!   Everything he has done profits nobody but himself and the board members and shareholders should be in an uproar!!
Mar 7, 2013 4:09PM
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The quality of the merchandise they sell now is below par and over priced
Mar 7, 2013 3:59PM
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The stores look like garbage, the quality, brands & styles went way down, and the prices SUCK!!!

They sent me a $10 coupon with free shipping for an online purchase. The online codes for both did not work, the website would not accept them. I called customer service..and long story short.they could only accept the $10 code, not the free shipping. I cancelled the order and ripped up the coupon..

Goodbye JCP.....

Mar 7, 2013 3:52PM
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Bring my Jeans back, I bought other stuff when I was in the store buying jeans,

but no more.

Mar 7, 2013 3:57PM
Mar 7, 2013 4:25PM
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We used to shop there, but can not find anything now, they did have good sales.  The store is mostly empty now.  If it is not broke, don't fix it.
Mar 7, 2013 5:13PM
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....Gee, and Johnson-CEO thought the Gay dads advertising promo and Ellen DeGeneres would save the company?!?.......

 

When your customers are long term loyal conservative shoppers and you shove the Gay agends down their throats....you are asking for a total collapse of your image. And that's exactly waht happened.

 

Since the board hired Johnson at $54 Million; which was an epic mistake....they all need to resign and let a new team manage this stricken company.

Mar 7, 2013 4:46PM
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The ego running the ship has to leave ASAP - his plan failed and like the Capt of the Titanic he says fluu speed ahead and spend more money on a failed concept. The suppliers will start to back out of deals because JCP can't guaranty the traffic thru those shop-within-a-shop - they can't buy merchandise because of their poor cash flow - suppliers will tighten credit and there isn;t enough cash to fund his plan. He had an opportunity to salvage the Christmas season and admit hewas wrong and quite likely the customers would have come back - now he has alienated them so much and the next big chance to salvage something would be  back to school and thats too far in the future with him still at the helm. He's got his $50MM so send him packing (oh yea he never moved) bring someone who knows big box retailing (not 15 product line Apple that was Job's concept anyway) and let Ron be a case study for future business schools on how NOT to implement a turn-around.

For $200K a year I will gladly take the job for one year and if JCP hasn't done better i will resign with no future options or severance required - I've been with consumer products companies for over 20 years as a supplier and know the signs of the death rattle from a financial perspective

It can be turned around but there has to be an admission of guilt and he has to go - the JCP customer was loyal and they will come back but not as long as the egotist is there

Mar 7, 2013 4:47PM
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I used to shop there but no more. The quality of clothes look cheesy, no quality to them.  I have a few tops from Penny's from long ago that I still wear. They didn't shrink or fade. I long for that type of quality. The sales were so much fun as I loved seeing how much money I had saved. There used to be a great selection of shoes, no more. I decided to go into the store recently to look at rugs and finding I had maybe three to choose from. I am now a Dillard's girl.
Mar 7, 2013 3:57PM
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JCP sucks anyways. Time to go away. Plus, Martha Stewart is dragging them further into the abyss of sh*t.
Mar 7, 2013 4:15PM
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They can not operate like a Wamart Clothing Dept. and expect the people that shop Dillards, Macy's, Victoria Secret, Hollister, etc. to come in and purchase.  The environment is not motivating to purchase anything. 
Mar 7, 2013 5:31PM
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I was in that store earlier today. I couldnt find any decent clothes to buy. i just walked out like most of the other people I saw in there. Most looked like they were just checking out the store. Sad.
Mar 7, 2013 4:06PM
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I want my Gloria Vanderbilt jeans. The items in the store sucks. Too small and expensive.
Mar 7, 2013 5:07PM
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GOOD, I'm HAPPY to hear that boycoting by the CONSERVATIVES actually WORKS.
Mar 7, 2013 6:00PM
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I went to the "new" JC Penneys and didn't buy a thing.  Just bring back the "old" version.....
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