JC PENNEY FIRES 2,200 EMPLOYEES – FORGOT ONE

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Posted on 7th March 2013 by Administrator in Economy |Politics |Social Issues

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Ron Johnson is the gift that keeps on giving. One of his biggest stockholders – Vornado Realty – sold 10 million shares at a price 50% below when they purchased the shares. That sounds like a vote of confidence. Johnson is also being sued by Macy’s for signing an illegal agreement with Martha Stewart. If he loses, there will be tons of empty shelves in JC Penney stores across the land. Sales are still plummeting. Of course, there are still a couple of Wall Street shills telling you it’s the best time to buy. Now Johnson fires 2,200 dedicated employees as he still collects his multi-million dollar pay package and commutes by a company Jet from his home in San Francisco.

This douchebag has to go. There is only one employee that needed to be fired and his name is Ron Johnson. The Board of Directors of this company is a fucking joke. They hired this asshole and watched him destroy a 100 year old company in one year. This is nothing but a death rattle. Unless they fire this fucker in the next month, JC Penney will be declaring bankruptcy within 12 months.

Troubles pile on in rough week at J.C. Penney

Kyle Kurlick/The Commercial Appeal
Teresa Chavez gives a garment a critical look at a Penney’s store in Southaven, Miss. Investors know how she feels after looking critically at J.C. Penney’s remake.

By MARIA HALKIAS

MARIA HALKIAS The Dallas Morning News

Staff Writer

mhalkias@dallasnews.com

Published: 06 March 2013 11:17 PM

Expect events of the last seven days to make it into academic case studies about J.C. Penney Co.’s attempt to become America’s favorite store.

And Penney employees found out Wednesday that things can get worse. About 2,200 people were laid off in stores and district offices.

Some bullish analysts changed their tunes Wednesday, and the stock price has lost 35 percent of its value in just the last five trading days. Former Penney chairman and CEO Allen Questrom said the board needs to act, adding that chief executive Ron Johnson should be replaced.

The third week of a trial over a contract dispute with competitor Macy’s over Martha Stewart merchandise continued in a reporter-packed New York courtroom. The trial may be adjourned until April because of scheduling conflicts.

The Plano-based department store chain’s new low points included Tuesday’s news that 10 million shares of stock were sold by a major shareholder who, oh yes, happens to be a board member.

Wednesday, Penney’s stock price fell 53 cents to hit a 52-week low of $14.43 a share.

All that follows last week’s news that Penney lost almost $1 billion and had a sales decline of a whopping $4 billion, falling to $13 billion in 2012.

Most of Wednesday’s staff cuts happened in about 100 stores that had significant sales declines last year, and the employee count will be reduced to match each location’s new level of business, said spokeswoman Daphne Avilla.

Administrative and back office jobs were cut across the chain of 1,100 stores and in 55 district offices.

In stores, department management duties are also being consolidated.

Staff cuts “will not impact the store experience,” Avilla said. “We’re not cutting folks on the floors. And our hope is to later be in a position to build back up our workforce.”

Penney’s stores, which range from under 65,000 square feet in small towns to more than 200,000 square feet in major malls, employ from 50 to 400 people per location.

Martha Stewart trial

Finally, on Friday, even if the trial isn’t over, New York Supreme Court Justice Jeffrey Oing will decide what sheets and towels Penney can sell starting in May when the retailer plans to have new home departments ready for shoppers. Martha Stewart designed products in a few categories that were believed outside her agreement with Macy’s.

Last summer, the judge issued a temporary order that prohibited Penney from selling Martha Stewart-branded products in the key home categories of bed, bath, tabletop and cookware. Instead, Penney developed products in those categories with Stewart’s help under the Everyday brand.

On Friday, Oing will rule whether Martha Stewart Living’s involvement in designing that product violated the Macy’s contract.

Penney is developing alternate plans and will make a statement after the judge rules, Avilla said.

Questrom, who spent five years in the early 2000s at Penney pulling it out of years of missteps, is frustrated that the board hasn’t forced Johnson to take his ideas to Middle America more slowly and test new merchandise and pricing.

“All these people are worried about Johnson keeping his job. It’s crazy,” Questrom said in a phone interview Wednesday. “What about all these Penney employees?

“It’s an old company, and he’s putting the nails in the coffin if they don’t start making some changes. There’s no reason to wait another quarter.”

The board “has allowed this to go on too long,” Questrom said. “I have to believe they are looking for his replacement.”

Silence

Penney board chairman Tom Engibous, the retired chairman and CEO of Dallas-based Texas Instruments Inc., didn’t respond to a request for comment. Other board members also declined to comment.

Johnson declined a request for an interview as well.

One could say that board member Steven Roth, chairman of Vornado Realty Trust, commented on Johnson’s performance and Penney’s prospects Tuesday when he sold 10 million shares of Penney stock. Roth and Pershing Square Capital founder William Ackman joined the board in 2011 after they amassed a 26 percent stake in Penney. Ackman has been Johnson’s most vocal supporter on the board but hasn’t commented this week.

On Wednesday, some analysts who had supported Johnson’s plans to turn Penney into a collection of mini shops within stores and adopt an everyday-low-prices strategy downgraded Penney.

Citi’s top retail analyst, Deborah Weinswig, visited Plano on Tuesday and met with Johnson and other top executives. She concluded that Penney will either continue limping along and spending money or the company will be sold and/or “senior leadership” will leave.

She downgraded Penney to a neutral rating from a buy and titled her report: “Wish I knew then what I know now.”

“We believe the potential for asset sales, a private takeover and senior leadership changes could support the shares and limit further downside from here,” Weinswig wrote.

Oppenheimer analyst Brian Nagel downgraded Penney stock after concluding that the company could go through all of its $900 million in cash this year and continue to post losses.

“The market is unlikely to afford JCP any benefit of the doubt until clear evidence of a turn emerges,” Nagel wrote in a report.

Johnson promised a year ago that Penney’s transformation would be self-funded, but asset sales were necessary last year and will likely continue, analysts said. JPMorgan analyst Matthew Ross said Penney will probably have to borrow money to keep building new shops.

6 Comments
  1. Hope@ZeroKelvin says:

    Don’t worry about Ron Johnson’s fate – after “fixing” (destroying) JC Penney, Obama will appoint Ron as his new Business Czar.

    That is how “success” is rewarded Obama’s Amerika.

    Well-loved. Like or Dislike: Thumb up 18 Thumb down 1

    7th March 2013 at 1:02 pm

  2. Hope@ZeroKelvin says:

    Oh, almost forgot:

    As “success” in Obama’s Amerika has been so totally “transformed”, perhaps as a doctor I should just kill scores of patients while running up tons of bills and firing all my staff. Fuck, Obama will appoint me as the fucking Surgeon General or as the head of HHS!!!!!

    Well-loved. Like or Dislike: Thumb up 14 Thumb down 1

    7th March 2013 at 1:04 pm

  3. Stucky says:

    Eventually he will get fired.

    He’ll get a $50 million dollar Golden Parachute.

    There is no justice in this god-forsaken world.

    Well-loved. Like or Dislike: Thumb up 15 Thumb down 0

    7th March 2013 at 1:17 pm

  4. Tammy says:

    I feel so bad for all the employees who have lost their jobs and those who had their 401Ks invested in JCP stock. They worked and invested in something they believed in.
    If your employees don’t have faith in leadership, the company will always fail.

    Like or Dislike: Thumb up 4 Thumb down 0

    7th March 2013 at 10:11 pm

  5. TeresaE says:

    The saddest thing is that JCP will be PRAISED for making the “tough” choices, when according to their own sales figures, this should have been done last year – at the latest. My guess is that JCP was doing the Great & Powerful O a BIG favor. And praying for lollipops, unicorns and a return of the American middle class.

    Good freaking luck JCP, good freaking luck.

    Well, the one thing we can say about the times we are now living in, they sure provide us plenty of fodder to mock and rant about.

    @Tammy, don’t fret too much about their 401(k)s, we are one big stock market crash (and ensuing panic) away from ALL of our savings/retirements being confiscated and poured into Treasury bonds. I’d rather lose it betting on a POS retailer, than to let those bastards at the newly formed “Consumer Protection” agency – an un-elected department now being created by the Federal Reserve.

    Like or Dislike: Thumb up 4 Thumb down 1

    7th March 2013 at 11:54 pm

  6. Dorkus Maximus says:

    My wife is a compulsive shopper. She loves kohls, target, walmart, kmart, shopko, big lots, tj max, you name it, but she never sets foot in Penneys or Sears (or macys or dillards for that matter). I’ve always found her to be a good barometer for retail and she’s never let me down!

    Like or Dislike: Thumb up 0 Thumb down 0

    7th March 2013 at 3:31 pm

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