My two favorite retailers – Sears and JC Penney are doing me proud today. The Wall Street shills and shysters have been touting the turnaround at JC Penney and telling the muppets to buy, buy, buy. Looks like some more dead muppets on the curb.
JC Penney and Sears are going to declare bankruptcy. It’s just a matter of when. Do not listen to CNBC bimbos, Wall Street scumbags, or the lying sack of shit CEOs of these walking dead retailers.
This picture will be seen in malls across America.
J.C. Penney shares tumble after September sales growth outlook cut
By Tomi Kilgore
Published: Oct 8, 2014 11:35 a.m. ET
NEW YORK (MarketWatch) — Shares of J.C. Penney JCP, -9.41% tumbled 11% Wednesday after the department store chain cut its September sales growth outlook. Chief Financial Officer Ed Record said at a meeting with analysts that same-store sales are now expected to rise in the low-single-digit percentage range over year-earlier results, down from a previous forecast of a mid-single-digit percentage growth. The stock has now lost 25% over the last month, to the lowest level seen since May 15. It has lost 10% year to date, compared with a 4.8% gain in the S&P 500.
And Sears?
http://www.zerohedge.com/news/2014-10-08/sears-halted-plunges-after-report-vendors-halts-shipments
I think I’ve mentioned my disgust with Sears before, so I’ll just say I won’t miss them one bit, but am not looking forward to the additional empty malls. Actually Jim, care to comment on whether Sears and JCP going under in the next 6 months or so will be the death of most shopping malls? How many have both as anchors, how many can survive if they disappear?
And, uh, oh, what happens to property tax revenues for the suburbs that have big shopping malls, if they stop getting payments from Sears and/or JCP, and 6-12 months later stop getting payments from the mall itself because it’s in bankruptcy? I’m sure that will be good for municipal budgets. Some of them might only be able to keep operating two or three MRAPs!
I will miss Craftsmen Tools…..the one good thing Sears makes.
The ‘murkin consumer is apparently alive and well as long as you look at unreported inflation in groceries, huge portions of income now going directly to insurers and Walgreens/pharmacies, and of course, Cadillac Escalades leasing for $240 a month (say the ad this morning). And Llpoh didn’t think the unemployed would be buying big luxury trucks.
Gotta’ say it is kinda joy-inducing to see your (and mine) predictions of upcoming, inevitible, doom, come to flower.
We’ve been so “wrong” for so long, it feels damn good to say, “told ya’ so!”
Jim told everybody so. At this point I don’t feel sorry for the haircuts that people, and pension funds, are going to take.
Refusing reality over marketing and propaganda never works out good. This time is going to be a doozy.
@Buckhed, the vast majority of Craftsman are now imported Chinese crap.
I look for a low-cost tool guy to take that over and import everything, or a place like Snap-On to buy it and return it to American production.
Or not.
The lifetime replacement guarantee dramatically changed when Kmart started selling them and China was producing.
I have a couple screwdrivers that I’ve been abusing and improperly using for over two decades. My robo-grips are my most used tool overall.
I loved Craftsman and would go to the Sears hardware (there used to be such things) just to salivate over the tools I wanted. I almost always had a Craftsman “want” on my Christmas list.
But not for the past 6 or 7 years, can’t get excited about cheap made, imported, crap that will end up breaking and – in all likelihood – hurt me.
This country has surely changed, and in so many ways, not for the better.
You know what we buy brand new? Gasoline for the vehicles. Underwear and socks. Toothbrushes, razors, soap, toilet paper. We also pay property taxes/fees/ insurance, but we don’t consider them “purchases” as much as form of protection that must be paid to the mobsters who run this operation we call the US economy.
There may be one or two small things I have forgotten, but that’s it. Virtually every other thing we need or require we trade for, buy used, grow or make.
Zero debt. ZERO. Purchase everything cash, if we don’t have cash, we don’t purchase. We also review where we stand financially a couple of times a week. That way even small expenditures don’t escape unnoticed.
I defy anyone out there to try and do the same and see if your life doesn’t improve immeasurably. Stress drops to nothing. You stop obsessing over things and focus on people, experiences, passions, hobbies, etc. You find that what you do earn is almost always converted into some form of savings or productive assets.
We are in a very small minority in this country, but I can already see a seismic shift in the way people are thinking and it’s headed in our direction, not back towards the spend until you die paradigm. Imagine what happens when it becomes the norm.
I buy my beer new, but my bourbon aged. That being said I have no problem buying used or going without, I already have too much stuff. I actually won one of those slim Ipads about a month ago. Rarely used it, gave it to my wife to use for school. I am stunned at the amount of stuff people, myself included collect over the years. I am not as bad as most, but as your kids age and you look at the collection of crap accumulated it is astounding. Now as they are older my wife and I have set about getting rid of the excess, selling it, and giving and throwing it all out. My garage and basement are mercifully clear, but with still more to go. The only thing packed is my workshop, but packed neatly. I think people would be amazed at what they could live without.
Bob.
Their sales were down because of climate change. I heard it right from the HNIC and Janet.
@TE
I worked in R&D as a Design Engineer for the company which designed and manufactured the Craftsman line of tools for Sears in Gastonia NC, Springfield MA and Springdale AR.
The screw drivers you mention were manufactured by Western Forge, in Colorado Springs. You may see a WF printed on the handles.
Late in the 80’s they started to mix in and import raw forgings for ratchet and wrenches from Japan and Taiwan, especially in their lower end product lines
They were brought in and enough “value added” at the machining facilities that they could be stamped with ” made in USA”.
@Gubmint cheese, that is so cool (your working in R&D, not what happened)!
Ah, the secret of “American made.”
We had China make us a crapload of specialty bolts (we are literally one of only a couple outfits that have these parts in the country).
It costs us more to have them heat-treated and ID stamped than it cost China to make them and ship them too us.
So they are “American Made.”
If PACKAGING costs more than 50% of total COGS, then a company can tell you it is “Made in USA.”
Yet one more way we are being lied to and laws have been passed to make the lies real.
Funny thing is the “lie” of Made in USA isn’t creating jobs. I wonder how that could happen?
We’ve been so “wrong” for so long, it feels right to me.
Maybe Kmart will double down and buy JCP.
That’s an awesome idea! Kmart/Sears can buy JCP, probably at fire sale prices. Maybe they can also get Target and pets.com while they’re at it. I would easily pay to watch that. And short the living hell out of anything it touches!
Persnickety says:
“And, uh, oh, what happens to property tax revenues for the suburbs that have big shopping malls, if they stop getting payments from Sears and/or JCP, and 6-12 months later stop getting payments from the mall itself because it’s in bankruptcy? I’m sure that will be good for municipal budgets. Some of them might only be able to keep operating two or three MRAPs!”
No worries. Local municipalities seize the malls for delinquent taxes, award a big contract to the mayor’s brother-in-law’s construction company to turn them into medium security prisons and then rent them out to the DHS for billions of dollars annually to use as FEMA CAMP light. You can’t have too many prisons right? They can keep the food courts to provide shitty fast food for the inmates and Obutthole and his sycophants can expound on all the jobs created and saved all in the name of security and freedom.
TE said:
“We had China make us a crapload of specialty bolts (we are literally one of only a couple outfits that have these parts in the country).”
I know a guy locally that has his own machine shop in his garage. There is a specialty connector that the power companies need. Apparently they had been getting them from China but the quality is low. By chance, this guy ran into a lineman one day who mentioned the problem. The machinist took a couple of them home and made a few dozen of them and gave them back to the lineman. A few months later he gets a call from the power company asking for more so he sets up a machine that is used to make screws and bolts and busts out 20,000 of them for $0.06 each. Within a couple of years he has power companies from all over the west requesting these connectors.
His only limitation on making them was the time it took to feed raw stock into the machine so he built a rig that feeds raw stock as needed and the machine runs 24 hours a day even when he’s on vacation. He shuts down for a few hours one day a week to replace cutters and clean and service the machine. He makes three times the money doing that in his garage as he earns at his day job and those connectors are 100% American made.
@Handscrabble – I commend you for doing that but how about buying online?
As the years go by, you begin to notice how certain beings rearrange the words to songs, they change the location of streets in a city you haven’t visited for a while, novels you haven’t read since high school are edited by unknown censors and they seem unfamiliar.
I noticed that Disneyland no longer has a nightly crew repairing foliage and keeping the grounds looking magical, even the paint on the buildings is faded. I knew there was no aerial tram going thru the Matterhorn but the nightly fireworks are gone and the enchanting feel of the place has faded to the sense of walking through your neighborhood and noticing yellowed lawns and moulting trees. The place has all the charm of a middle aged lesbian, zero sex appeal.
I_S, great for him, I love to hear stories like that.
Ah, Chinese “quality” again. My brother runs a tool & die, they lost 70% of their contracts between ’02 and ’04, nearly went out of business. The owner made drastic cuts – including cutting all health insurance, paid time off, etc., laid off half the staff and saved the company.
Now nearly 100% of the customers are back, China may be cheap but their default/not to print and other quality problems forced the customers – that are still around – back.
In ’07 or so, the fastener industry magazine, paid American labs to test 100 bolts imported from China with their one page “quality” certificates. (BTW, our company has to produce a book of info, including independent testing, in order for one of our bolts to go to GM or John Deere, China, not so much).
A full 70% did NOT meet specifications, 30% were out and out failures. Remember that when you talk about recalls at GM.
We got out of the auto business years before it fell due to the lopsided requirements and the fact that to “earn” the business we had to agree to liability in the millions – for less than $100 worth of parts in some cases.
Some business isn’t worth it, American auto industry has been that way for well over a decade.
TE/IS – all you say is true re auto companies.
Re the required paperwork, quality, etc., the modus operandi is this: they get a new, cheaper supplier, and accept basic paperwork. Then they begin to ratchet up the requirements re quality, delivery, paperwork, stockholdings, etc. and demand price decreases each year. When the supplier can no longer afford remain profitable, the auto company then moves on to the next sucker. The next sucker is allowed to provide basic paperwork, etc., at first, and the process repeats – ratchet up all the requirements until that supplier goes broke. This cycle continues ad infinitum.
Re the quality of Chinese products,this is the situation:
– The Chinese currently produce parts as good as anyone produces anywhere, more or less, and they are getting continually better
– The Chinese also produce absolute crap, that can be dangerous/lethal to use.
The problem is distinguishing which suppliers supply which type of product.
The root of the problem is that China is effectively lawless when it comes to legal protection for customers. There is no recourse if you end up with crappy products.
The good Chinese suppliers are generally good – and are intent on having a real business for the long run. The bad suppliers are intent on stealing your money once and running.
Until China puts in real, effective legal protections for customers, that is the way it will go.
When the 52 year old CEO of a retailer decides to “retire”, you know things are going well.
Gap CEO Glenn Murphy to step down, apparel retailer names digital head Art Peck as new CEO
By Suzanne Kapner
Published: Oct 8, 2014 5:18 p.m. ET
Gap Inc. said Glenn Murphy will step down next year as chief executive, having reversed a long-running sales slump but struggling more recently to improve performance at the company’s namesake brand.
Shares of Gap GPS, +1.70% fell 8% following the news of the leadership change as well as a weak financial outlook.
The retailer reported flat same-store sales for September, which it called disappointing because of an unexpectedly deep 3% drop in comparable sales at its Gap stores. The poor showing, which followed a 3% drop last year, weighed on the company’s profit margins.
Mr. Murphy, who is 52 years old, will be replaced by Art Peck, 59 years old, who currently heads the company’s digital division. The change is effective Feb. 1.
I was once a loyal customer of Gap. I bought their T-shirts because the quality was exceptional, the washed and packed well and the color held up. That was circa 88-92. Then they changed the fabric/dye and quality of manufacture to such a degree that the first time I tried on a new one it was like an undershirt from Sears. Flimsy, thin, threads unraveled after a washing or two. Cheap junk wearing an expensive label.
I have no doubt that someone in accounting worked out the CBA and found that enough label conscious people would offset the number of quality conscious buyers. I don’t know if that was such a great idea because anyone can get a cheap t-shirt for a fraction of the cost of a Gap T at the new (late 80’s) big box type stores that were springing up all over. I know that I never bought another thing at the Gap again. Over 20 years of purchases that they could have had but lost because they could save on the manufacture costs.
Not that a clothing company cares about their quality when the new head is promoted from their “digital division” whatever that’s supposed to be.
@Llpoh, Chinese quality. ALL “American” (and European) interests that set up shop are 51% owned by the Chinese government.
Protections would hit the government’s bottom line, which makes me believe it isn’t going to happen. The Communist government is no faster at admitting their own culpability than the Democratic or Socialist ones.
If enough Chinese are killed, then they might take the non-government executives out back and blow their heads off – exactly what they did with the Melamine/infant formula/milk thing.
When Chinese products killed millions of our dogs, I think all that happened was supplier “X” was disappeared (the company) and a “new” company (that I would bet looks a lot like the old one) popped up to take their place.
I’ve known and worked with a few Chinese nationals, theirs is a completely different culture. One of the reasons nepotism is so ingrained is the culturally/societal belief that you will always be screwed over, it might as well be by family. I am not kidding. This has been told to me by Chinese restaurant owners, Chinese H1-B visa tech workers and a medical science Phd that is currently dating my brother-in-law.
Things we used to build with 20 year plus lifespans (stoves, refrigerators, washers, Craftsman tool, Briggs & Stratton powered lawn mowers, Black & Decker power tools), we are now lucky to get 5 years and the vast majority of the products are imported – either by piece or wholly.
The saddest thing is going to a dollar store. The percentage of American produced to foreign is, simply, amazing.
I remember when I was a kid, all the high-quality toys were coming from the USA or Japan, Chinese toys were the “knock off” junk my poor childhood was filled with. (poorest Christmas ever, I was 8, I got a knock-off Barbie and an orange, that was the year I figured out Santa was either a fake or hated kids from working poor parents).
Now it is Made in USA dominating the cheap, plastic, crap markets in dollar stores.
We sold our kids’ (and country’s) futures for a few very rich men, a whole lot of corrupt politicians, fantasies and cheaply made Chinese crap headed for our landfills. Where, not shockingly, the cost of cleaning up this rampant materialism and import will be left squarely on the shoulders of those that can barely afford to feed themselves.
This will surely work out well.
Contrary to llpoh’s post …. I have NEVER seen, or experienced, a quality Chinese product. Maybe he’s talking about nuke reactors or high speed trains.
Not that Amerika does a better job. I believe GM recalled more cars this year than they built! Does Amerika produce any quality products anymore??
About two years ago we replaced the fridge, microwave, and dishwasher. A few days ago the dishwasher (Maytag!!) stopped working. Maytag dishwashers are still made in the USA! … Tennessee, I believe …. one of just 3 Maytag (now owned by Whirlpool, I think) manufacturing plants left in the USA … which once had several dozens across this country. We called in an appliance repair guy. Some circuit board fried. Cost to fix? $350 …. in addition to the initial $85 service call. What a goddamn fuckin crock of shit.
I asked the repairman — “I thought you were a lonely guy who never got called to fix these machines!!”. He laughed his ass off … said he gets more calls to fix Maytags than any other brand.
OK … so now I’ll boycott Maytag forever. Really … fuck’em, never again … and I’ll try to convince as many people I know to do likewise. And so what? Besides giving me some emotional satisfaction, I’m still in the same Shit Boat … the next washing machine will be just as fucking shitty. Because no consumer manufacturer in this world gives a flying fuck about quality and durability.
Chinese fasteners….no thanks.
Lessons in Chinese metallurgy and heat treat already learned here.
Hell, I know of some decent Chinese companies won’t even use steels made in China. Not worth the hassle of shitty quality, inconsistent product.
Many times they source materials from South Korea ,Japan and Scandinavia.
Stuck/TE – you use or see excellent Chinese products all the time. Cars are full of them. Electronics are full of them (Apple, anyone?). Generally, Apple products are very high quality, that iare occasionally let down by their rush to get them to market. The issues are engineering related as opposed to manufacturing related.
The Chinese are rapidly developing their auto and truck manufacturing capability. That in itself will drive overall quality capability of the Chinese up. And by up I mean really up.
US quality has always sucked, much as Stuck says. The US has NEVER been a high quality manufacturing country. They are great at making high volume with good, but not great, quality – they remain best in the world at that. The reason is Americans – the people, that is – do not have the mindset that the Japanese and Germans do re quality and systems. Since the mid to late seventies, the Japanese were the quality leaders. Germans next.
You are really comparing Chinese products to them. China will get lots better, at least the companies that are not just thieves. The big problem is that it is difficult to determine which are thieves.
Anyone who thinks the Chinese are not rapidly closing the gap on US quality is dreaming. They are getting closer every day. They may never catch Japan or Germany, but they will challenge the US on quality – at least the real companies will. The thieves will be thieves.