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.
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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I quit working at JCP a few years ago after being a lost prevention officer for three years so I know something of which I speak. FIrst they had employees coming and going like a revolving door because they don't pay them dirt and they treat them the same way. For most people who worked there it was just a stop over until they got a real job. There benfits sucked. The only good thing about working there was we could get a good discount on items in the store because we had first hand knowledge of when they would go on sale. Plus you could use your employee discount against the sale price. When I first started working there I had a great boss and a good store manager they both transfered to other JCP stores and the roof fell in when they hired two new people both were clueless morons who were not people persons and things got worst. There store managers would only last for about five years then they were expected to move on to other stores. It was not in writing but thats what happen if you wanted a job there.My boss was a women and we got along great but she wanted out of that store because they screwed over her because she was only suppose to be working there a short time and like usual they lied to her and she was there alot longer. but she got out of there before I quit. I never heard one person say they liked working there because they got payed squat with no real benifits. Most of there employees were put on as part time so they didn't have to give them any benfits. I could keep on telling you things about how they ran there stores but that would have to go into hard copy. I really enjoyed working with most of the employees because they worked hard for what they were payed
and there were some really cool department managers, but the people running that company didn't give a hoot about the ones who were making them money at my level. I never want to see anyone lose there jobs but it would deserve JCP to close because they are a cheep outfit to have worked for.I wish them luck but would not lose any sleep if they closed.
I was in retail management for the better part of 30 yearsand quite frankly it is crap like this that made me pursue a career change late in life. I am still shocked JCP brought in this single brand, 10 SKU executive to head up the company. JCP is a complicated business composed of several different components that are their own are not all that signficant, however when put all together they function pretty good and kept them viable as a mid tier retailer. As a consumer you knew what to expect and that alone provided a comfort zone for shoppers. They now have no identity, no product branding, customer service is terrible, the employess hate working there, and they they have killed a very loyal customer base. Cost cutting...i.e. firing people is always a short term fix to please investors, but in the long run kills a company as they lose some great talent. Get rid of this guy, get back to basics, re-negotitate some leases, bring back the catalog, and take an aggressive stance on pricing and product. It ain't rocket science.
To lose more than half their cash on hand in 1 year, over 500 million. Wonder what kind of bonus is he getting. Now he wants to lay off employees.
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Despite the mixed finish, the key indices traded higher across the board at the start of the session after the advance reading of second quarter GDP surpassed estimates (4.0% versus Briefing.com ... More
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