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 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.
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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