JC Penney 'Valentine's Day Massacre' coming?

Insiders are reportedly worried about rumors that the retailer's CEO will lay off hundreds at the corporate offices this month.

By Kim Peterson Feb 6, 2013 3:38PM
Customer Service counter at the J.C. Penney store in Westminster, Colorado on February 20, 2009 ( RICK WILKING/Newscom/RTR)J.C. Penney (JCP) insiders are worried about upcoming layoffs this month, calling it a "Valentine's Day Massacre," The New York Post reports.

There are rumors that CEO Ron Johnson may lay off at least 10% of the 3,000 employees working at the company's headquarters in Plano, Texas.

Johnson may have been itching to do this for a while but may have wanted to wait until the company's new fiscal year began, the Post reports. That's because laying people off costs money -- in severance pay, for example -- and Johnson didn't want to load up the previous fiscal year with even more expenses.

Sources tell the newspaper the company is running low on cash. And its third-quarter earnings report confirms it, showing that at the end of October J.C. Penney had $525 million in cash -- down from $1.1 billion a year earlier.

Johnson was asked about the rumors Wednesday on CNBC and didn't give a definitive answer. Here's what he said, according to The Dallas Morning News:
"No, no. There are a lot of rumors. We have a rumor a day, it seems like. Today it's about layoffs at our headquarters. I would never talk about that, but you've got to separate the facts from the rumors. Ultimately, we need to have the right cost structure for the business and we have to grow. And we're going to be sure we do those two things."
Johnson has been busy bringing in outside brands to stores, including Martha Stewart and Joe Fresh. Something has to give when you're making that kind of pricey investment, and the Post reports that the ax will likely fall on the designers and other employees who develop Penney's private-label brands.

Already, the Post reports, private brands like St. John's Bay and Arizona are starting to disappear from stores.

More on moneyNOW



Tags: Retail
335Comments
Feb 6, 2013 4:14PM
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JCP used to be my go-to store. I always did the majority of my school and Christmas shopping there. The store has turned into something I don't even recognize and now they're getting rid of St. Johns Bay and Arizona? I have no idea what these people are thinking. Count me out!
Feb 6, 2013 4:24PM
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Fire Ron J., fire Ellen D. then start to run JCP as a real business again instead of a political correctness program.  Johnson and the idiots who hired him should never be allowed to run a business again.  JCP was my favorite clothing store before all this crap happened.  I am sad to see a good business being killed by out of control management.
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After getting rid of Arizona & St. Johns Bay, there is no reason to shop there anymore.  Those were terrific brands, good quality and great prices.  I am done with JCP
Feb 6, 2013 4:57PM
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The St. Johns Bay brand was the reason I shopped at JCP.  FIRE the STUPID ceo and bring back St. Johns Bay brand.

Feb 6, 2013 4:27PM
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Why don't they do the right thing and get rid of that ahole Johnson.  I hate to tell you ignorant shareholders that he has to go.
Feb 6, 2013 3:49PM
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Take away St. John's Bay brand & I'm done.
Feb 6, 2013 4:41PM
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Their style is so-so sometimes and it seems like they are lacking to keep up with the times.  I am not a fan at all of their no coupon thing anymore and this fair pricing game they are playing is a joke.  You can put any suggested price on a ticket and then charge less so it seems like you're getting a good deal.  They take us for fools and thats why people are avoiding them.  I hope Ron Johnson gets the can soon, he's driving JCP into the ground. 
Feb 6, 2013 5:03PM
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I used to LOVE JCP, but recently their products do not have the same quality as before, and big and tall sizes are difficult to find.  I have been really disappointed by Penny's.

 

Feb 6, 2013 5:44PM
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Why in the world would you get rid of St. John's Bay??? What are they going to replace it with? Hipster outfits for the 18-25 bi-sexual demographic? I can't figure out how this Johnson has stayed on ; He certainly hasn't demonstrated a Midas touch now,  has he?
Feb 6, 2013 5:16PM
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I think it has gotten worse J.C. Penny's I agree with drkramer. I also liked to do my Christmas shopping there and also always asked for gift cards for their for Christmas and my birthday. Now forget it. I don't recognize it either like I use to. They should get rid of this CEO who I heard heads Target too and I don't like that store. Especially their clothes. They are geared toward the younger set  (Target). Same as Penny's well some stuff but their prices are high. No sales like they always had. They had good stuff there and always looked for their sale papers in the Sunday new papers. Not now. These poor people are going to loose their jobs now and the fault lies with the CEO. BRING BACK THE OLD PENNY'S.. Back when it was a good place to shop...
Feb 6, 2013 5:37PM
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What JCP is doing may be a "massacre" to their corporate employees, but the company itself is commiting a slow suicide and has been for a while. I've shopped there for at least 20 years and find myself buying less and less there. I don't know who does their buying, but all of my favorite brands are either going or already gone - SJB, Arizona, Cabin Creek, and have been replaced by no-name, no quality clothing.  I've heard that they're doing away with their catalog which would explain why every time I try to order something online it's "out of stock".  All of this is forcing me to shop elsewhere.
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wait.. guess this explains why its getting harder and harder to find my son some pants!
he is a very awkward size, very long legs and the waist of a toddler ( considering he's 7)
Arizona jeans were always our favorites, general wear well, reasonably priced and they FIT him...
now what is a mother suppose to dress her son in?
J.C.P get real you were the store for the moderate family.. Get back to it, we will come back, we need you

Feb 6, 2013 5:26PM
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I was looking for St John's bay the other day - loved their shirts - reasonable quality and MUCH cheaper than Tommy Bahama's - nothing similar in the stores - guess i will be heading to Kohls.

Ron may be the only persaon left there to turn out the lights - they missed their chance right before Christmas to admit their mistake and pick up on the Christmas season sales - Spring time is already here and back-to-school is too far away - the stores will be empty by then as the mfg's start to rethink their committment because Ron can't guaranty enough traffic in the stores to justify the expense to the mfg of paying for their portion of the store-within-a-store. Prices aren't competitive and no one is there to make that impluse buy when they are "sale" shopping. I still contend the only positive thing to come out of this will be a business school case study of how not to run a major box retailer. Ron doesn' really care other than his pride - he's got his $50MM now and that will go a long way to supplement his unemployment - Ackman controls the strings and as long he is stupid enough to buy into Ron's BS and he can short sell and still have his investment covered he doesn't give a rats **** what happens - wait another 2 weeks when the earnings report comes out LATE - not enough cash on the balance sheet to keep funding the transistion and not enough cash flow - creditors are tightening the reins - will be hard to get merchandise when mfg think you might file - tick tock tick tock

Feb 6, 2013 4:44PM
Feb 6, 2013 5:26PM
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The members of the Board at JCP have plundered the assests for their own gain.  They are, and have been over compensated for decades.  No wonder on one wants the stock.  The money goes into the pockets of the Board members and the Board members appoint Manaagement to ensure the process goes on and on and on and on.

 

The JCP brand doesn't represent families anymore.  It's all about catering to every group except working families with kids in school.  I find more value at the local thrift store.

Feb 6, 2013 4:28PM
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Which chain closes first?  JC penney or Kmart?  Both in trouble.
Feb 6, 2013 5:12PM
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Yes, me too with the St. John's Bay.. I did like their jeans and other stuff...
Feb 6, 2013 5:15PM
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I think the big issue with JCP is their poor service.  From salesperson to store manager, they are apathetic and void of energy, passion and commitment to service.  They don't have anything to offer - Walmart  and Target offer very low prices, Nordstrom's offers excellent service and quality products.  What does JCP offer? 
Feb 6, 2013 5:29PM
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St. John's Bay has been reliable clothing line for some time now, never cared for the fit or fabric of most Arizona.  (for my sons).  However, that being said, if I go to Belk, Macy, Dillard, and even Target there are similar brands there, similarly priced and the customer service is great. 
Feb 6, 2013 5:23PM
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According to MSN Money the laid off workers from J.C. Penney need to run and apply at Home Depot.
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