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
335Comments
Feb 6, 2013 8:04PM
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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.

 

Feb 6, 2013 7:51PM
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If Ron johnson or anyone with any clout is reading this, STOP destroying J C Penney's!!! Please bring back St.John's Bay. STOP trying to be something else....be what you WERE....all that was needed was for the stores to be updated and the staff coached to be friendlier.......now what is left......JCP.....represents Junk, Crap and Poor quality....
Feb 6, 2013 7:41PM
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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.

 

Feb 6, 2013 7:32PM
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They might as well hop on the same 'Titanic' ship as Sears Roebuck. Both failed to enter the new century with an eye to the future,ie; click shopping. If Americans can get what they want with a click of a mouse,they will not deal with inept clerks,rack after rack of really ugly clothing that won't fit anyone normal,and big "SALES" on items should have never been put in the stores.In short, terrible management has sent them spiraling into oblivion. There was a story a few years ago about a Walmart corperate 'buyer' that stocked the racks of many stores with sundresses or something of that type of item in a petite size.(Even their base customers children never fall into petite size ranges)The gravy train has jumped the tracks,and the Americans who could fix it are unwilling because of all the freeloaders who would want to ride for free.
Feb 6, 2013 7:32PM
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JCP and Sears and K-Mart are too 20th century. RIP!
Feb 6, 2013 7:18PM
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Thank goodness for Kohl's. We did a lot of shopping at Penny's over the years for cloths, drapes, bedding, bath, Christmas, etc. Since this new CEO came in and changed it all we rarely go there unless its to park and walk through to get to the Kohl's in our mall. Pretty soon Penny's will go the way of Wards then Sears and KMart are sure to follow. I'm sure the CEO's of these companies will get their millions in severance then go and kill off another brand somewhere. Remember garbage in garbage out but keep hireing from the same inner circle of the golden children trained at the same schools of higher learning. Oh, I forgot its not their fault. Its the people below them who are to blame. Lesson one of any good business school...
Feb 6, 2013 7:16PM
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I'm in my late fifties and have worn Stafford shirts and suits all of my adult life. Penny's customer base has always been more of a rural, conservative, religious bent. They were always my go to store for quality and service. Ever since they went with the new management and hired their lesbian spokesperson, they seem intent on being the spokesman and retailer for the homosexual world. I vote according to my religious beliefs, and in this case I will vote with my checkbook. I have bought my last item from JC Penny and look forward to the day that they go out of business.
Feb 6, 2013 7:15PM
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I broke down and went to a Penney's store yesterday to purchase my favorite pants:  Cabin Creek twill pull-on pants.  I love that brand. They are easy to wear, look good for any occasion, and last a long time.  After walking around searching for the pants and not finding them, I finally found an employee who told me she didn't even know what it was I was searching for.  I came home, looked on the internet, and found that Penney's no longer carries them.   The prices of the so-called clearance items at the store were outrageous.
Feb 6, 2013 7:01PM
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Quit shopping at J.C. Pennys when they went all out on their gay support , guess they found out that there just are not enough gays to keep them in business. Way to go genius now good people will suffer for your stupidity. 
Feb 6, 2013 6:58PM
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and he'll probably get a big fat bonus for running this company into the ground!
Feb 6, 2013 6:56PM
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How Ron Johnson still has a job is beyond belief.  He should be the first exec fired with a LEAD-FILLED balloon.
Feb 6, 2013 6:50PM
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I'm with drkramer....JCP has been my favorite store for years.  I buy almost all my family's clothes there and especially like St. Johns Bay and Arizona brands.  It is really sad to see this happening to what used to be a wonderful store. 
Feb 6, 2013 6:47PM
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The **** CEO needs to fire himself. It is due to his approving the losing designs and no sales. What an idiot. Maybe he can go run some other brand into the ground. My surprise is that the board has not fired him sooner.
Feb 6, 2013 6:42PM
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Why is it that the underlings are usually the first to be axed? Fire the damn CEO and then go from there. Oh yeah, I forgot, it costs millions to fire a CEO, right? What a screwed up world we live in !!!
Feb 6, 2013 6:38PM
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I went into a JCP store a couple of weeks ago. I haven't been to one since they stopped using coupons. It use to be the only store I shopping at for clothing and home goods. I was surprised at how low the prices on clothing were! They had a good selection and I got 5 things for under $90.00. All was Worthington Brand and they weren't on clearance. The amount of stock was low compared to what it used to be and the people working the cash registers were elderly, maybe 65? I am 55 and I am not knocking their ages but they were having a hard time with their handheld cash registers. It took a long time to get checked out. There weren't many customers. Today I received a $10 off coupon so I may stop in and spend it!
Feb 6, 2013 6:34PM
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Old Cash Penney is probably turning over in his grave. I use to work for JCP in the 60's &70's then it was a great store for young and old alike and prices were reasonable, But  I have not been in a JCP store in years, infact I still have 8 shares of stock left,  But more to the point their Ads are awful and clothes are to expensive, I am surprised they are still in business
Feb 6, 2013 6:30PM
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I deplore JCP. Stores are crowded. Poorly lit.You can never find anyone to assist you.  They deserve to go out of business.
Feb 6, 2013 6:29PM
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Got a paid charge card for Christmas. Went to the new jcp and looked hard for articles I would buy. The old Penney's would always have something for seniors and I could be assured of leaving with something wearable. The brands I would purchase were still there but the styling was aimed younger adults. After spending an hour looking for something I decided to see if I could get a refund and was told by a manager in not so friendly voice where to go. I ended up throwing the damn card at her and told her to spend it.
Feb 6, 2013 6:25PM
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JCp what are you doing? you`ve gotten rid of what i use to shop their for..Also bring back your catologs

Furniture etc.  I use to buy almost every thing there. Now i can`t find anything worth shopping there for.

Get rid of your ceo and hire someone who knows what their doing..What are you part of Bain Capital?

Get rid of customers and close the stores and put money in the ceos pocket..so very sad..

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