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.

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Tags: Retail
337Comments
Feb 7, 2013 9:08AM
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Death by a thousand cuts. From they're pricing policy to the terrible designed mail catalog, now include removing Arizona and St. John's Bay brands, and JCP will soon bleed out.
Feb 7, 2013 9:02AM
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Was in there just the other day...nothing for me at all. Too bad it is failing because of bad management.
Feb 7, 2013 8:58AM
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Been there twice this Month and to our surprise, shelves had not been stocked on certain regular merchandise we were looking for. All this remodeling and re-branding for what ? The store looks and feels bigger than ever but that's just because it is out-of-stock. We have been loyal Customers for years, and it is a shame to see such a great Company with great bargains & goods just fade away because of the one terrible idea that one  man had of eliminating great offerings for hard working Americans. Fire GREED and bring back the old JCP culture that made the Company such a success since the early days.
Feb 7, 2013 8:40AM
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the best thing they could do is lay off Ron Johnson!!  just look at what a downward spiral there has been with J.C. Penney since he took over the helm...
Feb 7, 2013 8:34AM
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I have been employed at JC Penney for the  past twelve years and I can tell you that people are not pleased with the changes. Since discontinuing Cabin Creek, SJB, Towncraft. Gloria Vanderbuilt, and now Arizona, and sales altogether, the foot traffic in my store has dropped 85%. Once our store gets rid of Arizona, we might as well close the doors. I think that by the end of the year, JCP will file for chapter 7 or be bought out by another company. I lean towards the latter happening.

Feb 7, 2013 8:28AM
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Going back 40 years Penney's had the best of everything.  Shoes, jewelry, clothing, anything you needed or wanted for the home.  Now it's a junk bin.  I loved Cabin Creek...the jewelry department, kids wear.  I don't even go in and check to see if they have what I need...I just walk right on by.
Feb 7, 2013 8:02AM
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If the board was dumb enough to hire Jojnson then it is time to close the doors on an American icon store. What a shame.
Feb 7, 2013 7:59AM
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Many great comments here-too bad it won't be seen by the responsible parties.
Feb 7, 2013 7:55AM
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I stopped shopping at JC Penny after all of the political correctness push of the "Daddy and Daddy ads". When you start targeting a minority group for your customer base you are sure to go under. And what place does sexual preference have in advertising? Are you selling sex or clothing?
Feb 7, 2013 7:49AM
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It's a shadow of the store it once was, so sad.
Feb 7, 2013 7:03AM
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The ONLY person that needs to be fired at JCP is Ron Johnson and soon. Otherwise you're lookin' at the next Montgomery Ward by the end of the year.
Feb 7, 2013 6:56AM
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What a shame.  I love JC Penney. I was in our store last Saturday and the line to check out was at least 15 people deep...I don't get it....I am sure the media doesn't help, .  I am not a fan of coupons in the first place,  so I am impressed with their prices.  I love to shop there, our store is clean, friendly and colorful unlike some of the top name stores that seem tired, dull and suffocating with clothing racks so jammed together it is difficult to walk around..  I find it creative and imaginative which makes shopping fun. I buy because I like the item not by brand so if those brands are leaving fine...maybe something else will replace them that I will like more...seems to me people are so quick to follow the negative people without waiting to see what will be offered....I think they are innovative and I am impressed with a company trying to make themselves better some ideas work better than others, but I admire their efforts..as i do in people who are willing to try.  Just wanted to say here is a person not jumping on the band wagon - I love JC Penney and will continue to shop there because i truly like their store. 
Feb 7, 2013 6:02AM
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What happen to the jcp plain pocket jeans they were 9.99.

That was a long time ago and that's all I used to wear.

They fit good and last a long time. The jeans today are thin

don't last as long for 40.00 to 60.00 $.

Feb 7, 2013 4:26AM
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How's that move to hire Ellen as your spokesperson working out for you?? Are the homosexual shoppers spending enough to keep you in business? Brilliant move by J.C. Penny, but hey that is the demographic you choose to cater to.
Feb 7, 2013 4:17AM
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I wonder how OBAMA Care figures into there decisions?????????????????????
Feb 7, 2013 4:14AM
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When Ingersoll Rand bought out the compnay I worked many years for one of the  first things they did was have a luncheon. They have a history of liquidating companies so after the purchase we were all a little worried for our jobs. At the luncheon the CEO and others reassured us that they bought us to grow us not close us down. 2 Weeks later 120 in the office were let go. They called them in and fired them and escorted them out the door. They couldn't even go get personal belongings. The luncheon became kn ow as  "The last Supper ". It took the 15 years to finally close the place that had been a mainstay in this little town for 70 years but IR held true to thier mission of profiting through liquidation rather than production. The product line they kept is made in China and India.

          the new age of corporate management  can't seem to figure out how to make a business run any more. JCP, Kmart and many others simply don't aks the customer what they need and even when they do they seem to ignore them and poof they are gone.

Feb 7, 2013 4:11AM
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Was never a big fan of St. John's Bay clothing, but seriously? This company is getting rid of one of it's go-to brands? Um, that's just STUPID business right there, people!!! JCP was AWESOME.....until they put moRON in as CEO and he came out with this 'right price' crap, no sales, no real discounts, and doing away with the tiered credit levels. I've been a platinum-tier for 5 years now, and I'm seriously disappointed with the changes of the last 18 months. The store in my current area does not have a very good selection in ANY department and no plans whatsoever to improve it, either! I have to drive over 2 hours to get to a DECENT (not great, but only decent) JCP. I WANT to try stuff on. I WANT to browse in an actual store. I sit in front of my computer enough without having to SHOP online!! I sure as heck don't want to order from a catalog/online either! I'm one of those weird sizes....in between L/XL/1X. I never know what size in different brands will fit me best so I NEED to try stuff on. The disappointment, and HASSLE, of having to return stuff is ridiculous for me. What am I supposed to do: order 3 of each item? I THINK NOT!!! Ron, you NEED to go!! Shareholders: I realize you want to see profits, but when the CEO starts ALIENATING the consumer base, 'profits' will soon be the least of your worries!!!
Feb 7, 2013 4:03AM
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That sale pricing JCP did failed to draw me and prices never seemed like real bargains.  I think the store needs a whole new approach of some kind in order to survive.  They upscaled with Sephora and those prices are unreal in this economy.  No woman is going to look that much better buying her cosmetics there instead of just Walmart.  I think except for Kohl's that smaller, more affordable stores like Old Navy are doing better.  Maybe JCP could downsize and go tthat way?

Feb 7, 2013 3:54AM
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I agree with most of the other comments, that jc penney, to me is no longer the old jc penney I knew! I am very limited on everything I  want to buy, no variety of sizes for different department's, and not much selection in what they do offer! It's no longer my favorite store!

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