Riding JC Penney to profit

The retailer is struggling, but some of its suppliers are making plenty of hay from the relationship.

By InvestorPlace Oct 2, 2012 10:43AM

Credit: Mary Altaffer/AP Photo
Caption: Customers enter the JCPenney store in the Manhattan Mall in New York in July 2009By Alyssa Oursler

IPLOGOWhen you're looking at any stock, it's crucial to remember that no company exists in a bubble. In fact, all companies form complex chains that make for some pretty interesting relationships.

Some companies, for example, cash in on the success of others. The latest example is with J.C. Penney's (JCP) suppliers.

The company's makeover has yet to fuel its own turnaround, but the retailer's many changes have their share of beneficiaries.

Most notably, Penney's partnership with Leggett & Platt (LEG), which provides fixtures and displays for the in-store boutiques that were recently unveiled, has helped revitalize the latter's commercial business.

J.C. Penney also wants to use radio-frequency identification (RFID) tags for all items in the store. R.R. Donnelly & Sons (RRD) is one contractor the company might partner up with for the inventory overhaul.

On top of that, the company's struggles have also given a nice boost to some competitors. Sears Holdings (SHLD) had double-digit sales increase in its apparel and footwear business during the first quarter that Ron Johnson's new strategy was implemented, according to The Wall Street Journal.

Benefiting from Facebook's struggles, too

A similar scenario is taking place for Google (GOOG), which has also ridden on the woes of a rival. The Internet giant's shares were shaky heading into Facebook’s (FB) IPO, but it now has cashed in on the new kid on the block's struggles.

While Facebook has lost nearly half its value since going public, Google has gained about a quarter of its value as investors realized the threat was probably overdone. Plus, the company has several qualities (check out this article to find out what they are) that would offset such a threat anyways.

And then, of course, there are names like Apple (AAPL) -- one that also exists in a web,  albeit a much larger one.

For the full rundown on which names have been killed by the tech giant’s success and which have ridden its coattails upwards, check out Apple, the Kingmaker  -- or Company-Breaker.

And remember, as the author Chuck Klosterman wrote: "In and of itself, nothing really matters. But nothing is ever in and of itself."

As of this writing, Alyssa Oursler did not own a position in any of the aforementioned securities.

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