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 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.
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..
Bring my Jeans back, I bought other stuff when I was in the store buying jeans,
but no more.
....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.
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
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Reports say the generous benefactor behind the huge gratuities is a former PayPal executive.
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