J.C. Penney's agony continues

Shares fall nearly 13% as investors continue to be skeptical about CEO Ron Johnson's turnaround strategy. To entice shoppers during the holidays, Penney will give away buttons with codes that could lead to prizes such as a Disneyland trip.

By Charley Blaine Nov 12, 2012 4:07PM

Credit: Mary Altaffer/AP Photo
Caption: Customers enter the JCPenney store in the Manhattan Updated: 5:56 p.m. ET

 

If you're Ron Johnson, touted as the wonder worker who would turn J.C. Penney (JCP) around, you can't be having much fun Monday.

The company's shares fell $2.67 to $17.97 today, their lowest price since March 2009. They're down 57% since February and nearly 15% since Thursday.

The problem Johnson faces is twofold. Right now, Wall Street is most definitely skeptical that Johnson's turnaround plan, which entails turning the department store chain into stores with a series of branded shops inside, will succeed before the company collapses. Credit Suisse downgraded the shares to "underperform" today and cut its price target 40% to $15, The Wall Street Journal noted.

And shoppers apparently are not any more excited about the business either. Fiscal-third-quarter sales, reported Friday, were down 26.1% from a year ago. The company reported a loss of $123 million, down from $143 million a year ago, but, well, big whoop.

Some 23% of third-quarter sales was clearance, up from 15% a year ago. The fourth quarter will be crucial to Penney's future and Johnson's.

The slump in Penney's stock price contrasts with the action in rivals Wal-Mart Stores (WMT), Target (TGT), Ross Stores (ROST) and TJX Companies (TJX). All are higher in a market that's modestly higher.

Johnson was hired away from Apple (AAPL), where he was in charge of the company's retail stores. But one problem he has is that he isn't selling iPhones or iMacs or iPads. He's selling jeans, socks, T-shirts, dresses, shoes and a host of other products that don't have the panache of Apple products.

One of Johnson’s biggest goals was to break the culture of sales and coupons that its customers had gotten used to, but he’s struggled to change the company’s pricing structure.

USA Today reported Monday that Penney's employees will be handing out more than 80 million small, holiday-theme circular buttons to customers between Black Friday through Christmas Eve. Each has a code on the back that, when entered on J.C. Penney's website, reveals whether a customer has won a prize. Some of the possibilities include a trip to Disneyland, tickets to Ellen Degeneres' show or J.C. Penney merchandise or gift cards.

Moreover, Penney will be holding at least two sales this year: on Black Friday and Cyber Monday, Johnson told USA Today, promising "the lowest prices ever in the history of our company."

That comes despite promising a new store concept and a consistent pricing policy.

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29Comments
Nov 15, 2012 9:25AM
Nov 13, 2012 11:24AM
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He was consider a genius.    Apple products sell themselves.   He's an overpaid moron.
Nov 13, 2012 12:52AM
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When I shopped in JCP ,they reorganize the store items in such a way as to make your shopping difficult. The popular items are in the furthest locations of the store, and that goes with all the other business's that do the same thing. They want the shopper to look at all the garbage before they get to the popular items. Many stores have riding  carts for the the long term shopper.
Nov 12, 2012 9:13PM
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CRAZY8S=I was wrong.The Repubs were bitter and nasty before and after the election.All

those idiots on FOX said Romney would win big .Why do people listen to right wing nazis

who are always wrong?Dick Morris was almost right.He said Romney would get over 400

electoral votes.206 is close.

Nov 12, 2012 8:54PM
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It's really queer how their sales have plummeted - almost like they alienated a large part of their customer base. Oh well, I'm sure Captain Ron will don his golden parachute, declare it a success, and bail out while leaving the rest of the employees to spiral in to impact.....
Nov 12, 2012 8:06PM
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Wow,those are really ,really,SUCK prizes and 80 million buttons,wow one in 80 million,the chance of a lifetime for nothing.In this down economy,how about cash,large buckets of cash.Tickets to ellens show,you would probably win another prize and jcp would televise,big whoop.Tickets to disney,they promote an immoral gay lifestle by having gay days at parks,on ships,at hotels,but not black days or hispanic days or muslim days,or jewish,catholic,protestant or Budda worshippers days or American Indian Days.

The sooner JCP goes out of business the better.

The same clothes,i looked at in sept.2011 have still not gone down in price.

JCPs business model is lost,they have a moron minding the store,they deserve to go belly up,i bet they cut back on salaries and benefits to their lower eschelon employees but not their executives.

This year,instead of a turkey for Thanksgiving or Christmas,the employees will get a coupon for 25% off a pound of balogna.

Nov 12, 2012 7:04PM
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He did the same thing Circuit City did.   He took his best people off commission which forced them to leave.  That left the company with a bunch of 18 year old kids standing around texting on there Iphones not giving a **** about customer service.  Plus there is no incentive to shop there its always one price.  No sales?  If he wants a model of how to run a department store take a look at Nordstoms and start marketing to that customer NOT the Target, Kohls, Walmart shopper.  Bring back some class Ron its not Target.  I like how these people talk about turning around Penneys.  JCPenneys was fine before he took over.  Do your homework and check the value of its stock before and after he took over.  He needs to be fired while the company still has time.  

Nov 12, 2012 7:03PM
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I can't tell you how tired I am of Ellen Degeneres.  I also no longer use Cover Girl cosmetics because she is their "spokes-model".  Nothing about her makes me want to emulate her by buying the products she endorses.  I certainly am not interested in winning tickets to her show.  That's no prize as far as I am concerned.

Nov 12, 2012 6:43PM
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No worries, Ron Johnson will be jumping out of Santa's sleigh with his Golden Parachute!
Nov 12, 2012 6:42PM
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I get my glasses at the optical department
Nov 12, 2012 6:39PM
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I've never been a big JC Penney fan, but the store's epic sales, particularly the sales close to Christmas, made Penney's a must-stop just prior to the holidays. This year, Macy's, JCP's next door neighbor in our local mall, got the spending nod. JC Penney looked more like a embarrassingly tepid A & F wannabe and not the solid, discount-producing Christmas cow that I've grown to know and love.  Call it a day, Penneys; lesson learned. Ditch the ill-conceived scheme to lure upwardly mobile hipsters, techies and pouty collegiates: Hollister has those demographics nicely covered. Penney's, my friend, is a mainstay for bargain hunting suburban housewives and grandparents on a budget. Bargain bins or bankruptcy - the choice is yours!
Nov 12, 2012 6:31PM
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i like the store and everyone has been helpful
Nov 12, 2012 6:28PM
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The sad thing is that, unlike competitors like Wal-Mart, Target, Sears and many others, in consideration of its employees and the meaning of the holiday, JC Penney is one of the few major retailers who won't start its Black Friday sales till 6am on Friday (the day after Thanksgiving).

Its sales number got burned last year because JC Penney did the same thing for Black Friday 2011. Guess the nice guy (and good employer) will get burned again this year.

Nov 12, 2012 6:24PM
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J.C. Penney is getting what it deserves. The store  managers violate workers basic rights by forcing workers to work through federal mandated lunch hours. They then allow the clocks to be changed daily to falsley reflect workers taking lunch. Thus workers are not paid for the hour subtracted for the false lunch, that  they actually worked daily. Management practiced this daily when I worked for them from October 10, 2008 thru August 5, 2009.
Nov 12, 2012 6:20PM
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Went to JCP on Friday night and they were closing the doors at 9:00!  Kohl's was open until midnight with a night owl sale and percentage off coupons available.  Guess where we spent our money.  Also, JCP didn't have the times posted on the door because they have their new "modern" look.  I had my infant grandson with me, had gotten him out of the car and into his stroller, and just entered the store when the announcement came they were closing.  I couldn't believe it.  How difficult would it be to remain open on Friday and Saturday nights until 10:00?  Especially this close to Christmas.  I miss the old JCP - bring her back please!
Nov 12, 2012 6:08PM
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So the new plan was to raise the prices and throw the gay agenda up our _____ ? How's that working out for ya? I'm still boycotting JC Penney - hope all the gay/lesbian community can save them now.
Nov 12, 2012 6:03PM
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Our local J.C. Penney's store in Ann Arbor MI was just renovated inside.  Although I appreciate the extra space between clothing racks (gained by eliminating nearly half the display racks) I am not pleased by the changes.  Previously the store had two checkout counters in the Men's Dept, now they have zero.  Not even a Customer Service counter in the Suit Department!

 

Any person intending to purchase garments or accessories in the Men's Dept now has to carry them half-way across the sales floor of the store to reach one of the four Customer Service counters evenly distributed throughout the Women's Dept.  Lord help anyone intending to buy a men's suit that needs to be altered.

 

Obviously Penney's does not want male customers, so I will gladly take my business elsewhere.

Nov 12, 2012 5:51PM
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Their clothes are drab.Like Sears they need a makeover.I hate to say it but Wal-mart is the

one shop store.Their clothes arn`t great and their meats are crap but they`re beating the

crap out of retailers.Consumer sentiment is way up now except on these sites where the

Repubs are still bitter over the election.They should put their big boy pants on.

Nov 12, 2012 5:42PM
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unless you live close to where the "ellen Degeneres' show" is film you really wouldn't want to win tickets. i sure wouldn't fly on my dime to just go to her show.
Nov 12, 2012 5:27PM
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What store doesn't play the coupon, "everything's on sale except...." and mid season, annual, semi annual, back to school, holiday, Veteran's Day, Memorial Day  and anything else you can think of sale?  The only things I consider truly on sale are the items on the clearance rack.  Sales are marketing games for every business.
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