I got my glossy JC Penney ad in my newspaper this morning. I threw it out, just like millions of Americans do every day. I have previously detailed the downward spiral of JC Penney in previous posts. They will join the ranks of that great retailer Montgomery Ward in the retail graveyard in the not too distant future. Their delusional egomaniacal, former Apple executive, CEO is driving the company into bankruptcy at a breakneck pace.
The brilliant Wall Street shysters are “shocked” with the results reported this morning. These paid shills will come out and recommend buying this piece of shit because the CEO has a brilliant plan. The free haircuts on Sunday are going to save the day. Here is a link to their horrific results and my assessment:
- They lost $211 million in one quarter and have lost $734 through nine months.
- Their sales declined by a mind boggling 26.6% versus last year. That is a $1.1 billion sales decline versus the prior year. Picture an airplane headed straight into the ground at 600 miles per hour.
- Their gross margin collapsed from 37.4% to 32.5% as NO ONE is buying their shit. Imagine their Christmas season.
- They are now selling off assets to generate cash to survive. These idiots were buying back stock, just like Kohls, just over a year ago.
- This company employees 159,000 people. It is and will be laying off thousands. Thousands more will see their hours cut.
- The balance sheet will reveal when this stinking carp goes belly up. They have burned through $560 million of cash even after selling off $279 million of assets to raise cash. They have $525 million left and their operations are deteriorating rapidly. At this rate of burn, they will surely be done during 2013.
- The only thing saving them now is the fact that they don’t have debt due in the next year and they have reduced their inventory by $1 billion. Don’t look for a big selection at JC Penney during the holiday season.
- With their free cash flow declining by $1.3 billion in nine months, they are in a death spiral.
The only way for the moron running this company to save it would be to reverse course on his No Sales mantra and to close his 20% worst performing stores immediately. His hubris and ego will not allow him to do this. He will go on his conference call and tell the Wall Street douchebags that his vision will eventually achieve success. In the near future you will see an announcement that JC Penney has declared bankruptcy, will be laying off 75,000 people and closing 600 stores. Book it.