SEARS BANKRUPTCY MARCH PICKS UP SPEED

You know things are bad when a retailer closes stores before Christmas. Sears is throwing in the towel before the fun and riots of Black Friday arrive. They’ve closed a couple hundred stores and fired 20,000 people in the last few years. Only 1,900 more stores and 200,000 more employees to go. Sears will declare bankruptcy. It might be in 2015 or 2016, but they will declare bankruptcy.

They are run by a Wall Street shyster and have been dying for the last decade. Wall Street reacted to the news by bumping the stock up. That’s the America we inhabit. They are even closing their store in the King of Prussia Mall. If you can’t make a profit in one of the most successful malls in America, you can’t make a profit anywhere.

More SPACE AVAILABLE signs coming to a mall near you.

Sears to close stores, lay off about 5,500: Seeking Alpha

Thu Oct 23, 2014 3:03pm EDT

A sign for the Sears department store is seen at Fair Oaks Mall in Fairfax, Virginia, January 7, 2010.

Credit: Reuters/Larry Downing

(Reuters) – Sears Holdings Corp (SHLD.O) is shuttering more than 100 stores and laying off at least 5,457 employees, investor website Seeking Alpha reported on Thursday, indicating the struggling retailer may be stepping up store closures.

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Sears said in August it had closed 96 stores in the six months since February and planned to close a total of 130 underperforming stores during the full fiscal year. It added at the time that it may shutter additional stores beyond the 130 target.

Sears spokesman Chris Brathwaite declined to comment on the number of planned closures, saying the company would provide an update when it reports quarterly earnings next month. Reducing operations to the best performing stores is key to Sears’ revival strategy, he said.

“While this has resulted in store closures where appropriate – decisions that we do not take lightly – we continue to have a substantial nationwide footprint with a presence in many of the top malls in the country,” Brathwaite said.

Sears shares rose 5.9 percent to $36.46 on Nasdaq at mid-afternoon.

Since August the company has moved to close at least 46 Kmart stores, 30 Sears department stores and 31 Sears Auto Centers, Seeking Alpha said, citing local media reports and liquidation notices.

Sears is closing stores to cut costs as it shifts to an “asset-light” business model. The company lost nearly $1 billion during the first half of the fiscal year in a downturn that has worried some vendors and prompted a series of moves by the company to generate cash.

On Monday Sears said it would raise as much as $625 million through an unsecured loan and equity warrants, about half of which will be purchased by Chief Executive Eddie Lampert and his hedge fund. It was the company’s third fundraising in a little over month.

It also said on Monday that it would lease seven stores to discount fashion chain Primark for an undisclosed amount, reflecting its effort to use generate rental income from better performing retailers.

Sears had 1,077 Kmart stores and 793 Sears stores in the United States as of Aug. 2. The company had 226,000 U.S. employees as of Feb. 1.

JESUS CHRIST HIMSELF COULDN’T SAVE SEARS

Here is the best of Jim Quinn regarding Sears:

“Jesus Christ himself couldn’t save Sears. Has anyone on TBP actually bought anything at a Sears/Kmart in the last five years? They are the worst run retailer in America. They are dead and don’t even know it. These morons have added 247 new stores since 2006 but have managed to decrease their annual sales by $10 billion. Eddie Lampert is truly a retail genius. Over the next five years you will see a battle of retail zombies. Every big box retailer is part of the walking dead.

Sears will be the first victim and the stronger zombies – Home Depot, Lowes, and Wal-Mart will destroy them by underpricing appliances and tearing their heart out. Target, Kohls, and Wal-Mart already destroyed their apparel and general merchandise business.

A forward thinking realist would take a look at his 4,038 stores and close the 1,000 worst performing stores and try to conserve cash for the rough years ahead. They will not do this. They will go out in a blaze of glory with the biggest retail bankruptcy in history. There will be 4,038 rat infested vacant hulks rotting in our communities for decades.”

Jim Quinn – May 2011

“Eddie Lambert bought K-Mart and Sears as asset plays. One problem – the asset values of the properties have been cut in half. The fact that Sears and K-Mart are the worst managed retailers in America hasn’t helped. Sears started the year with $1.3 billion in cash and has burned through $600 billion in twelve months. This Lambert is a fucking genius. He is butt brothers with Jimmy Cramer. They worked together at where else but – GOLDMAN “THE VAMPIRE SQUID” SACHS. Cramer has been pumping this stock for years. Let’s assess his brilliance as an investment guru.

The stock traded at $192 per share in early 2007. Jim Cramer rated it a buy at this level. Today it trades at $34 a share. That is a NEGATIVE 82% return in just under five years. That is about par for the course for Jim Cramer. It traded at $95 earlier this year. It dropped 27% yesterday alone.

Here’s the deal. These bozos opened 247 new stores since 2006 and now they announced they are closing 120 stores. That is a piss in the ocean. If they really got serious and closed their 1,000 worst stores, they would have a chance to survive. But the ego of Eddie Lambert will not allow that decision to happen. He thinks he is smart. He’s a graduate of Goldman University for Christ’s sake. His reluctance to accept the facts will result in the bankruptcy of this piece of shit retailer and will leave the rotting carcasses of 4,000 rat infested hulks across suburbia. This stock is going to zero.”

Jim Quinn – December 2011

“Time to buy Sears stock. It’s a can’t miss. Jim Cramer’s buddy, Eddie Lampert, has now appointed himself CEO of Sears. This douchebag has had control of Sears for ten years and he’s run it into the fucking ground. They are lucky to have JC Penney around, so they can claim they aren’t the worst run retailer on earth. Their quarterly sales declined again. Their sales have been in decline since the day Lampert took over. He was touted by the MSM as the next Warren Buffett. What an investing genius. He has managed to drive the Sears stock price from $180 to $40 in just five years. Sears will lose $800 million during a year where the economy was supposedly expanding. Imagine how well they will do in 2013 as the economy flounders in recession. Expect the store closing announcements in the spring. I just know Eddie will turn this around. I sure hope the former CEO’s “Health Problems” clear up with his $5 million severance package.”

Jim Quinn – January 2013

“There are 2,500 Sears/Kmart stores in the country. There are hundreds of thousands of employees. Not for too much longer.”

COMING TO A MALL NEAR YOU

SEARS EMPLOYEES

Jim Quinn – February 2013

That brings us to this morning. Sears stock is plunging as suppliers are worried about getting paid. When your suppliers lose confidence in your ability to pay, you’re toast.

Sears Halted, Plunges After Report Vendors Halts Shipments

Is this the beginning of the end for Eddie Lampert’s exercise in financial engineering that is Sears Holdings Corp? Bloomberg reports that three of the biggest insurance firms for Sears’ suppliers are seeking to reduce coverage… which has led to:

*SEARS VENDOR SAID TO HALT SHIPMENTS AS INSURERS REDUCE COVERAGE
*SEARS VENDOR WITHHOLDING SHIPMENTS IS MEDIUM-SIZED SUPPLIER

The stock has been halted twice on volatility limits and is down 10% for now. SRAC 5Y CDS are offered at ~39% upfront, implying around a 87% probability of default.

As Bloomberg reports,

Three of the biggest insurance firms for Sears Holdings Corp.’s suppliers are seeking to reduce coverage, prompting at least one medium-sized vendor to halt shipments to the department-store chain, people with knowledge of the matter said.

Euler Hermes Group, one of the top providers of credit insurance to vendors, has been sending out cancellation notice , according to the people, who asked not to be identified because the information isn’t public. Coface SA has indicated that it intends to do the same, two of the people said. Atradius Credit Insurance, another of the insurers, said it’s scaling back coverage, though the firm hasn’t yet pulled policies.

The situation has spurred one supplier to withhold products from Sears after a recommendation from its credit department, according to an e-mail obtained by Bloomberg News. The vendor, a closely held company, asked not to be named.

Suppliers rely on credit insurance to protect themselves against not getting paid for products they ship to retailers. For Sears, which has posted 30 straight quarters of declining sales, the shrinking support from insurers may make it harder to stock products and execute a comeback.

David Huey, the president and regional director of U.S., Canada and Mexico for Atradius in Baltimore, said the firm is decreasing its Sears supplier coverage “as the problems have become more obvious.”

“We’ve reduced as we’ve seen the risk increase,” he said in an interview. Though no policies have been canceled, “it could happen,” he said. “We’re reviewing it regularly.”

* * *

Do you hear that?

The fat lady has started singing. More Space Available signs coming to a mall near you.

PHILA. TELLS TEACHER’S UNION TO F#@K OFF

This might be the first rational action taken by the City of Philadelphia in the last 30 years. These idiots convinced the slimy politicians in Harrisburg to pass a $2 per pack cigarette tax a few weeks ago to supposedly raise $80 million per year to fund the bloated Phila School District budget. Now the government drones have admitted the tax won’t raise $80 million and they are still projecting a $7 million deficit for this year and a $71 million deficit for next year. The teachers’ union salary, benefits and pensions are gold plated and will surely bankrupt the City of Philadelphia.

It looks like someone grew some balls and out of the blue, the School District revoked the union contract and is now implementing reasonable sharing of healthcare costs to reduce annual expenditures by $44 million. It’s a great first step, but the pensions are where the real money is going. Someone at the state level has to grow a pair to fix the pension problem. And by fix I mean cut the gold plated benefits of all government workers.

The greedy corrupt unions should willingly work with the corrupt politicians to reduce their gold plated benefits now or face getting 20 cents on the dollar when these municipalities declare bankruptcy within the next five years.

Instead the teachers’ union drones will strike, protest, and sue the city. The liberal rag newspapers will write stories about the poor children. Same shit, different day. It’s time to tell all government unions to fuck off.

SRC revokes teachers’ contract, changes health benefits, redirects $44 million to schools

by on Oct 06 2014

Photo: Kimberly Paynter/WHYY

School Reform Commission Chair Bill Green (left) and Superintendent William Hite speaking to the media after Monday’s meeting.

After 21 months of fruitless labor talks, the School District made a bold move Monday to unilaterally restructure teachers’ health benefits and send $44 million in savings directly back to schools.

At a special meeting that was barely publicized until hours before its 9:30 a.m. start, with no public testimony before acting, the School Reform Commission unanimously voted to cancel the contract with the Philadelphia Federation of Teachers in order to rework its health-care provisions. The District also filed a legal action in Commonwealth Court to establish its right to rewrite the contract based on special powers granted to the SRC.

“This is our attempt to bring teacher contributions to health care in line with other local and national norms in a way that will allow us to remain able to serve students and avoid layoffs,” said Superintendent William Hite in an interview before the meeting. “If we don’t find additional savings, our children will continue to face inadequate resources. And there’s nothing else to cut from our central office or school budgets.”

On his wish list of what he hopes principals will restore, Hite included sufficient counseling services, enough personnel so teachers can meet and plan, more aides to monitor cafeterias and recess, teachers to offer more advanced classes in world languages, additional reading specialists for young children who have fallen behind, clerical help, and materials and supplies.

PFT spokesperson George Jackson said this was a union-busting action, denouncing the stealth move to hold the meeting with virtually no publicity.

“The manner that they did it in is outrageous,” he said. “We’re going to fight this.” The union learned of the planned action this morning.

The meeting was sparsely attended. One speaker, retired teacher Lisa Haver, was allowed to give public comment after the SRC’s vote. She denounced the body for acting without publicizing the meeting.

The District will require teachers and other PFT members to pay up to 13 percent of the cost of their medical premiums and reduce their choice of plans, starting Dec. 15. Now, most PFT members pay nothing toward health premiums. The payments will amount to $27 to $71 per month for single coverage biweekly paycheck, according to the District. For family coverage, the cost is $77 to $200 per month.

The SRC will also stop underwriting the union’s Health and Welfare Fund, which provides prescription, dental, vision and other benefits to active members and retirees. The District, which now pays $4,352 per member per year to the fund as required by the PFT contract, plans to provide the coverage directly to current employees but end benefits for retirees.

District officials said these two actions will allow for the redirection of savings of $44 million — plus a possible $10 million in federal funds – that will be sent back to schools in a series of three installments starting this month. The first installment will be $15 million, Hite said.

The action will help give the District the funds it needs to operate next year, SRC Chair Bill Green said. Next year the anticipated savings from health care costs will be $49 million.

However, spokesperson Fernando Gallard cautioned that the District is now anticipating a deficit of $8 million this year, due to a reduced estimate of cigarette tax revenues, and $71 million deficit next year. The financial supplement to schools may need to be adjusted, officials said.

With this move to redirect funds to schools, the SRC is clearly trying to win back the perception that it, not the union, has the best interest of the students at heart. The PFT had been building sympathy in the two-year contract stalemate by emphasizing how teachers are coping with difficult conditions and dipping into their own pockets to buy supplies despite a pay freeze.

While teachers work very hard, Hite said, “This is the notion of sharing in the sacrifice as we’re trying to navigate tough fiscal times so we are able to provide children with the resources they need right now.”

Union leaders have repeatedly pointed out that Philadelphia teachers earn lower salaries on average than their suburban counterparts; one study put the figure at 19 percent less.

The District had for months called for a pay cut on top of the benefit changes, but recently backed off that demand.

Hite said that he and the SRC “wanted to do this through an agreement,” and that despite Monday’s action, “we are still committed to reaching a negotiated settlement” covering economic terms and work rules. He has no plans to impose changes to other “economic provisions” of the contract. The last PFT contract expired in August 2012 and was extended for a year.

The 217 District-run schools will get varying allocations according to a formula that takes into account size and need, said Gallard. On average, the amount comes to about $200,000 per school.

The SRC and Hite took the action in the midst of one of the worst budget crises in the District’s history, one that has had devastating effects on schools. The PFT negotiations have dragged on over two shaky starts to a school year and during a period when thousands of District jobs have been eliminated.

In both 2013 and 2014, Hite wasn’t sure until late summer that he could even open schools on time.

Class size has grown. Northeast High started off the year with a science class with 62 students and Central with an English class of 50. Students have had to raise money themselves to put on a play, print a newspaper, or run an afterschool club. Most schools have art or music instruction, but few have both. Parents donate copy paper. Restaurants invite patrons to add a few dollars to their bills to send to the District.

Throughout the crisis, the union has been willing to absorb thousands of layoffs rather than give up benefits won over decades of hard-nosed, often bitter bargaining. Since fiscal 2011, PFT membership has dropped 25 percent, or by more than 4,000 people, according to District figures, although not all due to layoffs.

PFT president Jerry Jordan has said publicly that the union offered changes in health-care benefits to save money that were rejected by the District.

Chief Financial Officer Matthew Stanski has said that the union proposals would net only about $2 million in savings.

And providing retiree benefits, he said, “was never the intent of the [Health and Welfare] fund, and something we don’t believe we can afford.”

The union has firmly resisted letting go of its Health and Welfare Fund, long under the management of union treasurer Jack Steinberg and then his son, Arthur. The fund lent money to the District several years ago during a prior crisis, and is now sitting on a $45 million balance, District officials said – money they are now pointedly trying to demonstrate is more urgently needed in classrooms.

After months of public criticism of union contract provisions by District officials, it was noteworthy that the District’s action on Monday was strategically targeted only at the health benefits.

In September, Jordan responded to District demands for concessions by saying that the union is the one defending children’s needs by insisting that the contract include class size limits and staffing requirements, including that every school have a counselor, nurse, and librarian.

SRC Chair Bill Green has said the District doesn’t want those guarantees to remain in the contract. “We can’t agree to that, because that’s not good for kids,” Jordan said after a general membership meeting at which American Federation of Teachers president Randi Weingarten came to Philadelphia to bolster morale.

Weingarten told the teachers that “the path forward is to elect a new governor who believes in education and is willing to take responsibility” for the District instead of just “ideologically blaming” teachers for its fiscal troubles.

In the face of the crisis, other District unions, including principals and blue-collar workers, have agreed to historic concessions including pay cuts. But the PFT has stood firm in the position that teachers “are not a funding source.”

Jordan has said repeatedly that the state is at fault, having failed to live up to its constitutional mandate to provide all students with a “thorough and efficient” education.

Over the last two years, the District’s quest for long-term, stable funding from Harrisburg has not yielded enough to put it on firm financial footing. And in parrying the District’s effort to extract more money from the state, Gov. Corbett and Republican legislators openly cite the union as an impediment.

For instance, in an Oct. 1 debate, Corbett’s Democratic challenger, Tom Wolf, accused him of being “no friend to education. Corbett retorted, “I’m no friend to the unions.”

Philadelphia has borne the particular brunt of state policies and funding decisions under Corbett. Of a $1 billion reduction in state and federal aid sent to local districts in 2011, Philadelphia lost $250 million, triggering the current crisis.

And in answer to pleas for more recurring sources of funds, the Republican-controlled legislature has largely placed the burden on Philadelphia itself, through sales and cigarette taxes that it had to approve but that only apply to the city.

But Corbett is trailing Wolf in the polls with just a month left before the election, largely due to education policies that have left many districts, not just Philadelphia, short of cash. Across the state, hundreds of districts are cutting programs, raising property taxes, or both.

For the PFT, it is a case of holding out in hopes that better times are coming. The union has been working hard to elect Wolf, who has promised to tax natural gas extraction and increase the income tax rate on higher wage-earners to raise more money for education.

The union is also is fighting hard to abolish the SRC and return the District to local control.

But District officials believe that those hopes are misplaced – that the cost of running the District the way it is now, whoever is in charge, will continue to exceed reasonable projections for available funds in the future.

“We’ve been trying to convince the PFT of the need for structural change,” said one District source. “We’ve met with them hundreds of times, and given them thousands of pages of documents, different versions of the budget, scenario after scenario.”

By default, structural change has occurred, the source said, “but by reducing the head count,” instead of rethinking compensation and benefits.

Between the proliferation of mostly non-unionized charters, the closing of District schools, the conversion of others to private management, and layoffs caused by the budget crisis, the PFT’s active membership has shrunk from 16,408 in 2011 to 12,232 today, according to District data.

The layoffs have occurred according to seniority – “last in, first out” – and so affect the newest members, who are not the PFT’s core constituency. The District’s demand to change the layoff rules to include performance and give principals more leeway in deciding who goes has been another point of contention in the bargaining.

Whether the SRC actions will hold up in court is in question. The SRC was given special powers as part of the 2001 state takeover of the District – done, by the way, due to fiscal instability – but the parameters and extent of those powers are still uncertain. It tried earlier this year to get the state Supreme Court to clarify the issue, but the court declined to do so.

Still, the SRC has already ignored provisions of the expired contract. In summer 2013 it stopped paying teachers for so-called “step” and “lane” increases, which accrue automatically based on experience and advanced degrees earned. It also says it wants to move permanently to a “pay-for-performance” model that would be jointly worked out with the union.

It has already suspended other parts of the contract, including those on class-size limits, saying it doesn’t have the money. The union has filed individual grievances over many of these actions. But that is a time-consuming process that has yet to result in rulings with far-reaching impact.

WE’VE GOT A TOP

The only real lesson of history is that we never learn the lessons provided by history. Mitsubishi bought Rockefeller Center in 1990 for $2 billion. Sounds familiar doesn’t it? This deal marked the top of the Japanese bubble. It proceeded to burst and still hasn’t recovered after 24 years. By 1995 Rockefeller Center was bankrupt and the Japanese walked away from their investment. The Chinese real estate market has already begun to collapse. They think it is safe to buy real estate in the United States at record prices to avoid that collapse. They have been a driving force behind the cash buying of homes as investment properties. The Chinese are fools. The Waldorf Astoria will be in bankruptcy in a few years and the Chinese will be walking away from their “investment”. History will repeat, because it always does.

Hilton to sell Waldorf Astoria New York to Chinese insurer

By Craig Karmin and Michael Calia

Published: Oct 6, 2014 9:47 a.m. ET

Hilton Worldwide Holdings Inc. has agreed to sell its most prestigious hotel, Manhattan’s Waldorf Astoria, for $1.95 billion to a Chinese insurance company, the hotel operator said Monday.

The sale price is among the highest ever for any hotel and represents the latest sign of intense international demand for luxury hotels and other trophy properties in major global cities. The Waldorf Astoria’s price of $1.3 million a room is also among the highest ever paid in the U.S. on a per-room basis.

The acquisition is the first major deal in the U.S. for Anbang Insurance Group Co., which beat out at least two other bidders for the property, according to a person familiar with the matter.

For months, Hilton HLT, +1.07% has been weighing its options for the Waldorf Astoria on Park Avenue, including converting hundreds of its nearly 1,500 rooms to condos and reinvesting the proceeds into the hotel. In recent weeks, Hilton was leaning toward an outright sale of the property. But before the hotel company could begin the formal marketing process, Anbang and at least two other groups offered pre-emptive bids around the $2 billion mark, this person said.

Hilton will continue to operate the hotel under a 100-year management contract. The company plans to use the proceeds of the sale to acquire other properties, in part to avoid a hefty tax charge on the transaction.

An expanded version of this report appears at WSJ.com.

WHY SAN BERNARDINO IS BANKRUPT

Nothing like spending 99% of your career siting around a firehouse playing cards and eating lobster and steak on the taxpayer, while getting paid $190,000 per year, retiring at 50 years old at full salary, and acting like you deserve it. This is the kind of shit that will not continue. There will be no tears shed when greedy government union drones lose their sweet salaries, benefits and pensions. The unsustainable will not be sustainable.

Via Public Sector Inc.

Firefighter pay shows why San Bernardino is bankrupt

Steven Greenhut June 24, 2014 Pensions

San Bernardino is a poor city about 50 miles east of Los Angeles in the Inland Empire — a place where a $50,000 salary would be typical and where home prices are nowhere near what they are in fancier areas of coastal Southern California. Yet the bankrupt city is trying desperately to unload some of its outlandish contracts with public employees, especially with the firefighters’ union. “San Bernardino, California, said that to exit bankruptcy it must terminate a union contract that pays an average annual salary of $190,000 to each of its top 40 firefighters,” according to an article in Bloomberg. That’s just salary. Firefighters receive the generous “3 percent at 50″ retirement package that allows them to retire with 90 percent of their final years’ pay at age 50. And there are lots of pension-spiking gimmicks and other benefits on top of that.

As the article notes, because of a voter initiative it may not be legal to dump those contracts. And I’ve looked at a city salary schedule, and the salaries are almost unbelievable throughout the city. City officials blame the economic downturn and the popping real-estate bubble for their financial plight. But that’s like saying that a salary cutback is the cause of an individual’s personal bankruptcy — never mind the Maserati in the garage, the trips to Hawaii, the diamond rings and the $200 nightly bottles of wine.

San Bernardino is in a financial fix that other California cities have mostly avoided, but the level of public-employee enrichment there is typical. These cities are run for the benefit of those who work there. Public services are a side matter at best. Two-thirds of the nation’s firefighters do this job for free, as volunteers. In what world is making them millionaires (when you add in their retirement benefits) a sensible idea? As usual, the city’s residents will pay the price in the form of reduced services. In Stockton and Vallejo, where similar salaries are common, residents also got hit with increased taxes. There’s something vulgar about hitting poor residents with higher taxes to pay for the city’s wealthy elite. And I hear no progressive voices complaining.

About Steven Greenhut

Steven Greenhut is the California columnist for U-T San Diego. Greenhut formerly was vice president of journalism at the Franklin Center for Government and Public Integrity, where he managed a team of 35 investigative reporters and editors who covered state capitols across the country. He founded CalWatchdog in 2009, which provided Sacramento-based investigative news coverage and he writes regularly for publications including Reason, Human Events, Bloomberg and City Journal. He is author of the 2009 book, “Plunder! How Public Employee Unions Are Raiding Treasuries, Controlling Our Lives And Bankrupting the Nation” and the 2005 book, “Abuse of Power: How the Government Misuses Eminent Domain.” View all posts by Steven Greenhut →

CHRISTIE ROLLS CRAPS AGAIN WITH $260 MILLION OF TAXPAYER FUNDS

I’m reconsidering my position on Chris “The Blimp” Christie becoming president. He has gotten so good at pissing away NJ taxpayer money on his crony capitalist Wall Street hedge fund ventures, that he would make a fine president, pissing away your Federal tax dollars on his neo-con, corporate, and socialistic misadventures. He already has experience kissing Obama’s ass to get our money to waste on rebuilding mansions on beaches and making campaign commercials and little diddies like “Stronger than the Storm”. I understand his presidential campaign song is called “Stronger than the Lapband”.

Revel Casino, the enormous white elephant of Atlantic City, has filed for bankruptcy for the 2nd time in the last two years. Christie, the capitalist tool of Wall Street, thought he knew more than Morgan Stanley. They realized in 2010 this was a disaster waiting to happen. They walked away from their own $1.2 billion investment, leaving the casino half built. Even a blithering idiot could see that Atlantic City gambling revenue has been and will be in decline for the foreseeable future. PA and Delaware have been opening casinos like gangbusters and the pie of suckers is only so big. But Christie is a new Republican free market capitalist who takes from the taxpayer and gives to Wall Street hedge funds. Here are his words of wisdom from 2011:

“My vision for Atlantic City is that Atlantic City needs to become Las Vegas East.”

Someone should get fat boy a pair of glasses.

He jump started the project with $260 million of “tax incentives”, also known as giving NJ taxpayer money to his Wall Street campaign contributors. Within one year of opening Revel filed bankruptcy. Christie poo pooed this little glitch with more brilliant analysis:

“What’s happening here is merely a shifting of debt load to equity. They’re showing their faith and confidence in the concept and in the future of Atlantic City by not walking away and closing the place down.”

Those Wall Street hedge funds were surely showing confidence in the future of Atlantic City. Well at least for one more year, before filing again. This $2.4 trillion monstrosity is a sieve and is now estimated to be worth $300 million. Unless some sucker buys it by mid-August the doors will shut. Maybe the Christie Blimp can float on in and offer some new Wall Street hedge fund more “tax incentives” to keep this wonderful casino afloat.

Christie 2016 Bandwagon – hop on now before it’s too late. If he wins, they’re going to need a bigger helicopter.

Via the NYT

Owner of Revel Casino in Atlantic City Files for Bankruptcy Protection

By CHARLES V. BAGLIJUNE 19, 2014

The $2.4 billion Revel Casino Hotel, whose opening two years ago on the Atlantic City boardwalk was hailed as a revival of the city’s gambling industry, filed for protection from creditors in federal bankruptcy court on Thursday as the owner formally put the property on the auction block.

The casino’s owner, Revel Entertainment Group, also said it had obtained a $125 million loan to keep the resort open while it seeks a new owner. But it notified the casino’s 3,140 employees that Revel could close as soon as Aug. 18 if efforts to sell the property failed. Analysts say the property is now worth substantially less than $300 million.

Revel’s announcement is a blow to Gov. Chris Christie’s five-year plan to resuscitate New Jersey’s gambling industry. In 2011, the state invested $260 million in the long-stalled casino project so that construction could resume.

Revel’s chief executive, Scott Kreeger, issued a statement on Thursday saying, “We will work to reach an agreement with a new owner who will help ensure Revel’s long-term financial stability and who shares our commitment to providing Revel’s guests and players an exceptional experience in lodging, gaming, entertainment and recreation.”

The company said it filed for bankruptcy protection, which it did on Thursday for the second time in two years, “to address liquidity issues and facilitate a sale of substantially all of Revel’s assets.”

Revel Entertainment, which has lost more than $260 million since the casino opened, began exploring a sale or partnership a year ago. Negotiations with one suitor, Hard Rock International, collapsed in the spring.

“It’s not surprising,” said Alan Woinski, who publishes Gaming Industry Weekly Report. “You can’t keep losing money like they are.”

Revel, whose 57-story hotel is the tallest building in Atlantic City, was supposed to symbolize a new approach to gambling, with an emphasis on luxury, with windows that, unlike other casinos, faced the ocean. The casino itself was on the third floor.

But the resort never took off.

“It was supposed to be like City Center in Las Vegas, not dependent on gambling,” Mr. Woinski said. “But this is a day-tripper market. It’s empty during the week.”

Combined revenues for Atlantic City’s 12 casinos continued to slide. The Atlantic Club, also on the boardwalk, closed in January.

Competition also has sharpened as casinos and slot parlors have opened in Delaware, Maryland, New York and Pennsylvania. Last year, gambling revenues in New Jersey fell to $3 billion, down 41 percent since peaking in 2006 at $5.2 billion.

Revel itself has a star-crossed history. Morgan Stanley, the resort’s principal owner, halted construction in April 2010, walking away from a $1 billion investment. Work resumed under a new ownership group, which included Chatham Asset Management, a hedge fund, two years later with assistance from the state.

RETAIL SALES CONTINUE TO SUCK

As usual, the corporate MSM is attempting to spin a shitty retail sales report into a report showing consumers are back baby. They desperately want this storyline to convince the sheeple that all is well in our consumer spending dependent economy. The headline on the Rupert Murdoch owned Marketwatch was:

U.S. RETAIL SALES RISE AT A BRISK PACE

I guess their definition of brisk and my definition of brisk are slightly different. The storyline during the winter was the shitty retail sales were due to the cold weather. We were told retail sales would skyrocket come spring. Well let’s examine what has happened from March through May, which the last time I checked constituted Spring. Here is a link to the data I’ll be referencing:

http://www.census.gov/retail/marts/www/marts_current.pdf

Retail sales grew by a pitiful 0.3% over April.
Excluding the debt financed auto sales, retail sales grew by an infinitesimal .07%.
We know for a fact that auto loan length is at a record high of 66 months, auto leases are at an all-time high of 26%, and 34% of all loans are being made to people with bad credit. Does anyone really think these are sales? They constitute 20% of all retail sales in this country.
Retail sales are $18 billion higher this May versus last May. $8.4 billion, or 47% of that increase, is attributable to Government Motors through Ally Financial and the rest of the Wall Street bankers doling out easy money loans to deadbeats.
During this supposed retail recovery from the dreadful winter, total retail sales have grown by a total of $3.6 billion from March through May. That is a miniscule 0.8%. When you back out the auto sales, it is a microscopic 0.5%. On an annualized basis retail sales are growing at below 2%.
With inflation running at 5% or higher, REAL retail sales are declining. This is why retailers are reporting horrible profit results.
Over the last three months retail sales, excluding autos, has risen $1.7 billion. You’ll be thrilled to know that $0.6 billion of that increase is from you paying more at gasoline stations. That is 34% of the increase. Another $0.8 billion was spent at building and materials stores to make repairs on your houses damaged from the winter storms.
Over the last three months sales have declined at electronics & appliance stores, food stores, restaurants and for all the idiots thinking on-line is the reason bricks and mortar is dying – INTERNET SALES DECLINED. I guess sales tax does matter.

Again, the MSM and the Wall Street shyters are wrong. There is no retail recovery. It was not the weather. The only retail being done is through easy long-term auto and home furnishing debt. The loan losses will follow when the next financial crisis arrives. The retail death rattle grows ever louder as Radio Shack announced results that foretell a bankruptcy filing before year end. That will mean 5,000 more SPACE AVAILABLE signs in strip malls and regional malls across America.

RETAIL DEATH RATTLE GROWS LOUDER

The definition of death rattle is a sound often produced by someone who is near death when fluids such as saliva and bronchial secretions accumulate in the throat and upper chest. The person can’t swallow and emits a deepening wheezing sound as they gasp for breath. This can go on for two or three days before death relieves them of their misery. The American retail industry is emitting an unmistakable wheezing sound as a long slow painful death approaches.

It was exactly four months ago when I wrote THE RETAIL DEATH RATTLE. Here are a few terse anecdotes from that article:

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun.

Retail store results for the 1st quarter of 2014 have been rolling in over the last week. It seems the hideous government reported retail sales results over the last six months are being confirmed by the dying bricks and mortar mega-chains. In case you missed the corporate mainstream media not reporting the facts and doing their usual positive spin, here are the absolutely dreadful headlines:

Wal-Mart Profit Plunges By $220 Million as US Store Traffic Declines by 1.4%

Target Profit Plunges by $80 Million, 16% Lower Than 2013, as Store Traffic Declines by 2.3%

Sears Loses $358 Million in First Quarter as Comparable Store Sales at Sears Plunge by 7.8% and Sales at Kmart Plunge by 5.1%

JC Penney Thrilled With Loss of Only $358 Million For the Quarter

Kohl’s Operating Income Plunges by 17% as Comparable Sales Decline by 3.4%

Costco Profit Declines by $84 Million as Comp Store Sales Only Increase by 2%

Staples Profit Plunges by 44% as Sales Collapse and Closing Hundreds of Stores

Gap Income Drops 22% as Same Store Sales Fall

Ann Taylor Profit Crashes by 75% as Same Store Sales Fall

American Eagle Profits Tumble 86%, Will Close 150 Stores

Aeropostale Losses $77 Million as Sales Collapse by 12%

Big Lots Profit Tumbles by 90% as Sales Flat & Exiting Canadian Market

Best Buy Sales Decline by $300 Million as Margins Decline and Comparable Store Sales Decline by 1.3%

Macy’s Profit Flat as Comparable Store Sales decline by 1.4%

Dollar General Profit Plummets by 40% as Comp Store Sales Decline by 3.8%

Urban Outfitters Earnings Collapse by 20% as Sales Stagnate

McDonalds Earnings Fall by $66 Million as US Comp Sales Fall by 1.7%

Darden Profit Collapses by 30% as Same Restaurant Sales Plunge by 5.6% and Company Selling Red Lobster

TJX Misses Earnings Expectations as Sales & Earnings Flat

Dick’s Misses Earnings Expectations as Golf Store Sales Plummet

Home Depot Misses Earnings Expectations as Customer Traffic Only Rises by 2.2%

Lowes Misses Earnings Expectations as Customer Traffic was Flat

Of course, those headlines were never reported. I went to each earnings report and gathered the info that should have been reported by the CNBC bimbos and hacks. Anything you heard surely had a Wall Street spin attached, like the standard BETTER THAN EXPECTED. I love that one. At the start of the quarter the Wall Street shysters post earnings expectations. As the quarter progresses, the company whispers the bad news to Wall Street and the earnings expectations are lowered. Then the company beats the lowered earnings expectation by a penny and the Wall Street scum hail it as a great achievement. The muppets must be sacrificed to sustain the Wall Street bonus pool. Wall Street investment bank geniuses rated JC Penney a buy from $85 per share in 2007 all the way down to $5 a share in 2013. No more needs to be said about Wall Street “analysis”.

It seems even the lowered expectation scam hasn’t worked this time. U.S. retailer profits have missed lowered expectations by the most in 13 years. They generally “beat” expectations by 3% when the game is being played properly. They’ve missed expectations in the 1st quarter by 3.2%, the worst miss since the fourth quarter of 2000. If my memory serves me right, I believe the economy entered recession shortly thereafter. The brilliant Ivy League trained Wall Street MBAs, earning high six digit salaries on Wall Street, predicted a 13% increase in retailer profits for the first quarter. A monkey with a magic 8 ball could do a better job than these Wall Street big swinging dicks.

The highly compensated flunkies who sit in the corner CEO office of the mega-retail chains trotted out the usual drivel about cold and snowy winter weather and looking forward to tremendous success over the remainder of the year. How do these excuse machine CEO’s explain the success of many high end retailers during the first quarter? Doesn’t weather impact stores that cater to the .01%? The continued unrelenting decline in profits of retailers, dependent upon the working class, couldn’t have anything to do with this chart? It seems only the oligarchs have made much progress over the last four decades.

Retail CEO gurus all think they have a master plan to revive sales. I’ll let you in on a secret. They don’t really have a plan. They have no idea why they experienced tremendous success from 2000 through 2007, and why their businesses have not revived since the 2008 financial collapse. Retail CEOs are not the sharpest tools in the shed. They were born on third base and thought they hit a triple. Now they are stranded there, with no hope of getting home. They should be figuring out how to position themselves for the multi-year contraction in sales, but their egos and hubris will keep them from taking the actions necessary to keep their companies afloat in the next decade. Bankruptcy awaits. The front line workers will be shit canned and the CEO will get a golden parachute. It’s the American way.

The secret to retail success before 2007 was: create or copy a successful concept; get Wall Street financing and go public ASAP; source all your inventory from Far East slave labor factories; hire thousands of minimum wage level workers to process transactions; build hundreds of new stores every year to cover up the fact the existing stores had deteriorating performance; convince millions of gullible dupes to buy cheap Chinese shit they didn’t need with money they didn’t have; and pretend this didn’t solely rely upon cheap easy debt pumped into the veins of American consumers by the Federal Reserve and their Wall Street bank owners. The financial crisis in 2008 revealed everyone was swimming naked, when the tide of easy credit subsided.

The pundits, politicians and delusional retail CEOs continue to await the revival of retail sales as if reality doesn’t exist. The 1 million retail stores, 109,000 shopping centers, and nearly 15 billion square feet of retail space for an aging, increasingly impoverished, and savings poor populace might be a tad too much and will require a slight downsizing – say 3 or 4 billion square feet. Considering the debt fueled frenzy from 2000 through 2008 added 2.7 billion square feet to our suburban sprawl concrete landscape, a divestiture of that foolish investment will be the floor. If you think there are a lot of SPACE AVAILABLE signs dotting the countryside, you ain’t seen nothing yet. The mega-chains have already halted all expansion. That was the first step. The weaker players like Radio Shack, Sears, Family Dollar, Coldwater Creek, Staples, Barnes & Noble, Blockbuster and dozens of others are already closing stores by the hundreds. Thousands more will follow.

This isn’t some doom and gloom prediction based on nothing but my opinion. This is the inevitable result of demographic certainties, unequivocal data, and the consequences of a retailer herd mentality and lemming like behavior of consumers. The open and shut case for further shuttering of 3 to 4 billion square feet of retail is as follows:

There is 47 square feet of retail space per person in America. This is 8 times as much as any other country on earth. This is up from 38 square feet in 2005; 30 square feet in 2000; 19 square feet in 1990; and 4 square feet in 1960. If we just revert to 2005 levels, 3 billion square feet would need to go dark. Does that sound outrageous?

Annual consumer expenditures by those over 65 years old drop by 40% from their highest spending years from 45 to 54 years old. The number of Americans turning 65 will increase by 10,000 per day for the next 16 years. There were 35 million Americans over 65 in 2000, accounting for 12% of the total population. By 2030 there will be 70 million Americans over 65, accounting for 20% of the total population. Do you think that bodes well for retailers?

Half of Americans between the ages of 50 and 64 have no retirement savings. The other half has accumulated $52,000 or less. It seems the debt financed consumer product orgy of the last two decades has left most people nearly penniless. More than 50% of workers aged 25 to 44 report they have less than $10,000 of total savings.

The lack of retirement and general savings is reflected in the historically low personal savings rate of a miniscule 3.8%. Before the materialistic frenzy of the last couple decades, rational Americans used to save 10% or more of their personal income. With virtually no savings as they approach their retirement years and an already extremely low savings rate, do retail CEOs really see a spending revival on the horizon?

If you thought the savings rate was so low because consumers are flush with cash and so optimistic about their job prospects they are unconcerned about the need to save for a rainy day, you would be wrong. It has been raining for the last 14 years. Real median household income is 7.5% lower today than it was in 2001. Retailers added 2.7 billion square feet of retail space as real household income fell. Sounds rational.

This decline in household income may have something to do with the labor participation rate plummeting to the lowest level since 1978. There are 247.4 million working age Americans and only 145.7 million of them employed (19 million part-time; 9 million self-employed; 20 million employed by the government). There are 92 million Americans, who according to the government have willingly left the workforce, up by 13.3 million since 2007 when over 146 million Americans were employed. You’d have to be a brainless twit to believe the unemployment rate is really 6.3% today. Retail sales would be booming if the unemployment rate was really that low.

With a 16.5% increase in working age Americans since 2000 and only a 6.5% increase in employed Americans, along with declining real household income, an inquisitive person might wonder how retail sales were able to grow from $3.3 trillion in 2000 to $5.1 trillion in 2013 – a 55% increase. You need to look no further than your friendly Too Big To Trust Wall Street banks for the answer. In the olden days of the 1970s and early 1980s Americans put 10% to 20% down to buy a house and then systematically built up equity by making their monthly payments. The Ivy League financial engineers created “exotic” (toxic) mortgage products requiring no money down, no principal payments, and no proof you could make a payment, in their control fraud scheme to fleece the American sheeple. Their propaganda machine convinced millions more to use their homes as an ATM, because home prices never drop. Just ask Ben Bernanke. Even after the Bernanke/Blackrock fake housing recovery (actual mortgage originations now at 1978 levels) household real estate percent equity is barely above 50%, well below the 70% levels before the Wall Street induced debt debacle. With the housing market about to head south again, the home equity ATM will have an Out of Order sign on it.

We hear the endless drivel from disingenuous Keynesian nitwits about government and consumer austerity being the cause of our stagnating economy. My definition of austerity would be an actual reduction in spending and debt accumulation. It seems during this time of austerity total credit market debt has RISEN from $53.5 trillion in 2009 to $59 trillion today. Not exactly austere, as the Federal government adds $2.2 billion PER DAY to the national debt, saddling future generations with the bill for our inability to confront reality. The American consumer has not retrenched, as the CNBC bimbos and bozos would have you believe. Consumer credit reached an all-time high of $3.14 trillion in March, up from $2.52 trillion in 2010. That doesn’t sound too austere to me. Of course, this increase is solely due to Obamanomics and Bernanke’s $3 trillion gift to his Wall Street owners. The doling out of $645 billion to subprime college “students” and subprime auto “buyers” since 2010 accounts for more than 100% of the increase. The losses on these asinine loans will be epic. Credit card debt has actually fallen as people realize it is their last lifeline. They are using credit cards to pay income taxes, real estate taxes, higher energy costs, higher food costs, and the other necessities of life.

The entire engineered “recovery” since 2009 has been nothing but a Federal Reserve/U.S. Treasury conceived, debt manufactured scam. These highly educated lackeys for the establishment have been tasked with keeping the U.S. Titanic afloat until the oligarchs can safely depart on the lifeboats with all the ship’s jewels safely stowed in their pockets. There has been no housing recovery. There has been no jobs recovery. There has been no auto sales recovery. Giving a vehicle to someone with a 580 credit score with a 0% seven year loan is not a sale. It’s a repossession in waiting. The government supplied student loans are going to functional illiterates who are majoring in texting, facebooking and twittering. Do you think these indebted University of Phoenix dropouts living in their parents’ basements are going to spur a housing and retail sales recovery? This Keynesian “solution” was designed to produce the appearance of recovery, convince the masses to resume their debt based consumption, and add more treasure into the vaults of the Wall Street banks.

The master plan has failed miserably in reviving the economy. Savings, capital investment, and debt reduction are the necessary ingredients for a sustained healthy economic system. Debt based personal consumption of cheap foreign produced baubles & gadgets, $1 trillion government deficits to sustain the warfare/welfare state, along with a corrupt political and rigged financial system are the explosive concoction which will blow our economic system sky high. Facts can be ignored. Media propaganda can convince the willfully ignorant to remain so. The Federal Reserve can buy every Treasury bond issued to fund an out of control government. But eventually reality will shatter the delusions of millions as the debt based Ponzi scheme will run out of dupes and collapse in a flaming heap.

The inevitable shuttering of at least 3 billion square feet of retail space is a certainty. The aging demographics of the U.S. population, dire economic situation of both young and old, and sheer lunacy of the retail expansion since 2000, guarantee a future of ghost malls, decaying weed infested empty parking lots, retailer bankruptcies, real estate developer bankruptcies, massive loan losses for the banking industry, and the loss of millions of retail jobs. Since I always look for a silver lining in a black cloud, I predict a bright future for the SPACE AVAILABLE and GOING OUT OF BUSINESS sign making companies.

THE GREAT RETAIL RECOVERY

Retailers and restaurants always close stores by the thousands when the economy is growing, unemployment is plunging, and incomes are rising. Right?

Use your brains people. Stop believing the storylines. Open your eyes and see what is happening. Count the number of Space Available signs on your next road trip through suburban hell.

Does the story peddled by the government and legacy media match the reality you see with your own eyes?

This list of store closings is just the tip of the iceberg. There are tens of thousands to go over the next five years.

Guest Post by Tony Sanders

Jobs Recovery? 17 Retailers Shutting Down Stores (And Not All From Internet Competition)

This is the worst employment recovery in American history from a credit bubble. And the news just keeps getting worse and worse, particularly for service workers at retail shops. You can’t blame Amazon.com for stealing sales from Red Lobster, Ruby Tuesday’s, Sbarro’s or Quizno’s, however.

Here are 17 companies that have closed stores or will close stores soon:

* Office supply company Staples has announced plans to close 225 stores by 2015, which is about 15 percent of its chain. Staples already closed 40 stores last year.

* Office Depot, Staples’ main competitor, which bought OfficeMax last year, is expected to announce its own round of store closings soon.

* Radio Shack has announced plans to close 20 percent of its stores this year, which is as many as 1,100 stores. The company, which operates around 4,000 stores, reported that its sales fell by 19 percent last year.

* Albertsons closed 26 stores in January and February according to Supermarket News. Analysts expect many more Albertsons could soon be shuttered because Albertsons owner hedge fund Cerberus Capital Management just bought Safeway Inc. Some Safeway stores could soon shut down as well.

* Abercrombie & Fitch, the clothing retailer, is planning to close 220 stores by the end of 2015. The company is also planning to shut down an entire chain it owns, Gilly Hicks, which has 20 stores, 24/7 Wall Street reported.

* Barnes & Nobles is planning to shut down one third of its stores in the next year: about 218 stores. The chain has already closed its iconic flagship store in New York City.

* J.C. Penney is closing about 33 stores and laying off about 2,000 employees.

* Toys R Us has plans to close 100 stores according to The Record newspaper in New Jersey.

* The Sweetbay Supermarket chain will close all 17 of the stores it operates in the Tampa Bay area, The Herald Tribune newspaper reported. Many of the stores might open as Winn-Dixie Stores. Sweetbay closed 33 stores in Florida last year.

* Loehmann’s chain of discount clothing stores in the New York City area has entirely shut down. Loehmann’s once operated 39 stores, The New York Times reported, and was considered an institution by generations of New Yorkers.

* Sears Holdings, which owns both Sears and Kmart, to close another 500 stores this year, according to industry analyst John Kernan to CNN. Sears has already shut down its flagship store in Chicago.

* Quiznos has filed for bankruptcy, USA Today reported, and could close many of its 2,100 stores.

* Sbarro which operates pizza and Italian restaurants in malls, is planning to close 155 locations in the United States and Canada. That means nearly 20 percent of Sbarro’s will close. The chain operates around 800 outlets.

* Ruby Tuesday announced plans to close 30 restaurants in January after its sales fell by 7.8 percent. The chain currently operates around 775 steakhouses across the US.

* Red Lobster will sell an unknown number of stores. The chain is in such bad shape that the parent company, Darden Restaurants Inc., had to issue a press release stating that the chain would not close. Instead Darden is planning to spin Red Lobster off into another company and sell some of its stores.

* Ralph’s, a subsidiary of Kroger, has announced plans to close 15 supermarkets in Southern California within 60 days.

* Safeway closed 72 Dominick’s grocery stores in the Chicago area last year.

The culprit? Among other factors, personal consumption growth YoY has declined from 9.04% in March 2000 to 3.45% in January 2014. And real median household income has plunged as well.

And if I want fresh half-and-half for my White Russians (aka, Caucasians), I go to my neighborhood Ralph’s like Jeffrey Lebowski (not Amazon.com). I hope they didn’t close Lebowski’s neighborhood Ralph’s!!

WHO COULDA HAVE PREDICTED THIS?

Shocking news. I wish someone had predicted this. Wall Street will say it’s BULLISH!!!! They need some more muppets to fleece.

1,100 more empty stores in malls across America. I’m sure landlords will have no problem filling those spaces. That hot new retailer SPACE AVAILABLE will take over all of the locations.

I’m sure this brilliant retail strategy will surely revitalize RadioShack. I wonder when JC Penney, Sears, Kohls, and dozens of other retailers will be announcing the same brilliant strategy?

Here is a preview of RadioShack’s new ad campaign.

RadioShack to close 20% of its stores; earnings miss

Same-store sales slide 19%

By Ben Fox Rubin

RadioShack Corp. said Tuesday that it expects to close up to 1,100 U.S. stores, or about 20% of its footprint, while reporting its fourth-quarter loss widened significantly.

Shares (NYSE:RSH) dropped about 28% premarket as the struggling electronics retailer’s results were considerably worse than market expectations. The company said it will continue to have about U.S. 4,000 locations.

Chief Executive Joseph C. Magnacca said the poor results were driven by lower store traffic, intense discounting particularly in consumer electronics and a “very soft” mobility marketplace, as well as a few operational issues. Despite all those problems, he said the retailer is making progress on its turnaround.

Bloomberg

RadioShack has struggled to reverse a string of recent losses deepened by a sales strategy focused around smartphones, which failed to improve revenue over the last two years.

Magnacca, a former Walgreen Co. executive who was hired last February, outlined a strategy last year to refurbish stores by overhauling layouts and removing items from the shelves, part of a broader effort to improve perception among younger customers while keeping traditional “do-it-yourself” patrons satisfied.

Sales at stores open at least a year dropped 19%, driven by traffic declines and soft performance in the mobility business, while gross margin narrowed to 29.8% from 35.8%.

RadioShack reported a loss of $191.4 million, or $1.90 a share, compared with a year-earlier loss of $63.3 million, or 63 cents a share. Excluding some write-downs and other items, the per-share loss was $1.29.

Revenue sank 20% to $935.4 million.

Analysts polled by Thomson Reuters had most recently forecast a per-share loss of 14 cents on revenue of $1.12 billion.

The company ended the quarter with total liquidity of $554.3 million, including $179.8 million in cash and cash equivalents and $374.5 million available under a 2018 credit agreement.

JC PENNEY LOSES $235 MILLION IN 4TH QTR & $1.9 BILLION FOR THE YEAR: STOCK SOARS

JC Penney stock is soaring by 12% after hours because they ONLY lost $235 million in the 4th quarter. Back up the truck and buy buy buy. This is a can’t miss investment. CNBC and Wall Street are gaga. The new CEO who was the old CEO before he got fired for the Apple douchebag is blathering about the tremendous 2014 that awaits JC Penney. The Wall Street lemmings are buying this load of bull again and trying to convince muppets to buy this piece of shit dying retailer.

Here are the facts:

4th quarter revenue FELL by $102 million versus last year’s horrific 4th quarter.
Free cash flow PLUNGED by $169 million versus last year’s horrific 4th quarter.
For the year, their revenue fell by ONE BILLION dollars and they managed to lose $1.9 BILLION versus ONLY losing $1.5 BILLION the year before.
Despite producing lower sales in the 4th quarter, their inventory ROSE by $600 million, a 25% increase. Inventory should grow at the same rate as sales at a well run retailer. They missed by that much. This means massive discounting and plunging margins for the 1st quarter.
Their debt ROSE by $2.6 BILLION in one year. They must repay $700 million in the next 12 months. Good luck with that.
They now have $5.6 BILLION of debt versus $3 Billion of equity.

This dog is still on course for bankruptcy, but the Wall Street shysters don’t care about facts. They have a recovery story to sell to the muppets. JC Penney is back baby!!!!! But buy buy.

JCP’s Quarter In Charts: Retailer Generates Least Amount Of Cash Flow In Holiday Quarter In Recent History

Submitted by Tyler Durden on 02/26/2014 17:06 -0500

Moments ago JCP did what it does best: released results that missed expectations, with Revenues in the traditionally strongest, holiday (Q4) quarter of $3.78 billion below the $3.86 billion expected, and comp sales up 2.0% below the 2.1% expected. Additionally, the company’s profit margin was 28.4%, the second lowest in recent history, and only better than the 23.8% posted a year ago when the company was openly imploding. But the red flag was Free Cash Flow, driven entirely by inventory liquidation, was $246 million: the lowest such amount for the holiday quarter also in history. Whether or not this miss was not quite as bad as a worst case miss could be, whatever that means, is unclear but for now the traditional post-earning squeeze has pushed the stock higher. How long this particular squeeze persists is unclear, but likely depends on the longer-term viability of the company, and recent trends. To determine what these are, here are some charts showing how the company has performed in recent years.

First, here is JCP’s all important Free Cash Flow. While in Q4 JCP generated a little over $200 million in cash, it is the next three quarters that matter, as this is when the company burned the bulk of its cash. As a reference point: last year, in the Q1-Q3 period, JCP burned $3 billion.

JCP better not intend on burning $3 billion this year too. Why? Because as it reported, it expects its liquidity “to be in excess of $2 billion at year-end.” Really? How? Because that inventory build and $2-3 billion cash need will hardly grow on trees.

Next, we look at revenue: while this missed as we noted above, it was the only bright spot in the earnings report – the good news: it wasn’t an all out crash, even if like FCF, it was the lowest revenue for the holiday quarter in recent history.

Next, and perhaps most troubling, was the reason for the company’s subar free cash flow creation: in a nutshell, the company did not sell nearly enough inventory in the quarter. As the following chart shows, JCP liquidated, and thus generated “only” $812 million in inventory cash in the quarter: in prior years this number was always greater than $1 billion. This likely means even greater mark downs in coming quarters as JCP scrambles to dump even staler products.

Last and almost least, was JCP’s profit margin in the quarter. Surprisingly, it was a substantial 28.4%. Why? See the chart above – the company opted to not liquidate stale inventory and pull margins down even lower. This was “good” for the profit margin, but bad for cash flow creation, and even worse for future quarter margins.

Finally, the cherry on top in the newsflow had nothing to do with JCP per se, but with the SEC: as readers will recall, it was back on September 26 when the company announced on CNBC it would not do a follow on offering only to announce, a few hours later, that it was doing precisely such a follow on equity offering. We were disgusted and appalled. We are more disgusted and appalled by the SEC which has announced the following:

J C PENNEY: SEC NOT RECOMMENDING ACTION
J C PENNEY: SEC NOTICE SAID AGENCY CONCLUDED INVESTIGATION

And that, in a nutshell, is all you need to know about our criminal markets.

DO I EVER TIRE OF BEING RIGHT?

I penned the paragraph below a couple weeks ago. Since then, Sears/Kmart has been announcing closings across the land. Today it is being confirmed that Radio Shack will be shuttering 500 more stores, after shuttering 500 last year. Only 6,000 more to go. This was so predictable, a BLS economist could have seen it coming. Of course, Jim Cramer says it’s a buy.

“Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.” – Famous Retail Guru – Admin – The Retail Death Rattle – 1-14-14

One year ago I wrote an article called Disastrous Results, detailing the coming bankruptcy of Radio Shack.

The chickens are coming home to roost. There will be 500 more vacant shells in malls across America. Liquidation is in the foreseeable future. Book it Dano.

THE RETAIL DEATH RATTLE

“I was part of that strange race of people aptly described as spending their lives doing things they detest, to make money they don’t want, to buy things they don’t need, to impress people they don’t like.” ― Emile Gauvreau

If ever a chart provided unequivocal proof the economic recovery storyline is a fraud, the one below is the smoking gun. November and December retail sales account for 20% to 40% of annual retail sales for most retailers. The number of visits to retail stores has plummeted by 50% since 2010. Please note this was during a supposed economic recovery. Also note consumer spending accounts for 70% of GDP. Also note credit card debt outstanding is 7% lower than its level in 2010 and 16% below its peak in 2008. Retailers like J.C. Penney, Best Buy, Sears, Radio Shack and Barnes & Noble continue to report appalling sales and profit results, along with listings of store closings. Even the heavyweights like Wal-Mart and Target continue to report negative comp store sales. How can the government and mainstream media be reporting an economic recovery when the industry that accounts for 70% of GDP is in free fall? The answer is that 99% of America has not had an economic recovery. Only Bernanke’s 1% owner class have benefited from his QE/ZIRP induced stock market levitation.

Source: WSJ

The entire economic recovery storyline is a sham built upon easy money funneled by the Fed to the Too Big To Trust Wall Street banks so they can use their HFT supercomputers to drive the stock market higher, buy up the millions of homes they foreclosed upon to artificially drive up home prices, and generate profits through rigging commodity, currency, and bond markets, while reducing loan loss reserves because they are free to value their toxic assets at anything they please – compliments of the spineless nerds at the FASB. GDP has been artificially propped up by the Federal government through the magic of EBT cards, SSDI for the depressed and downtrodden, never ending extensions of unemployment benefits, billions in student loans to University of Phoenix prodigies, and subprime auto loans to deadbeats from the Government Motors financing arm – Ally Financial (85% owned by you the taxpayer). The country is being kept afloat on an ocean of debt and delusional belief in the power of central bankers to steer this ship through a sea of icebergs just below the surface.

The absolute collapse in retail visitor counts is the warning siren that this country is about to collide with the reality Americans have run out of time, money, jobs, and illusions. The most amazingly delusional aspect to the chart above is retailers continued to add 44 million square feet in 2013 to the almost 15 billion existing square feet of retail space in the U.S. That is approximately 47 square feet of retail space for every person in America. Retail CEOs are not the brightest bulbs in the sale bin, as exhibited by the CEO of Target and his gross malfeasance in protecting his customers’ personal financial information. Of course, the 44 million square feet added in 2013 is down 85% from the annual increases from 2000 through 2008. The exponential growth model, built upon a never ending flow of consumer credit and an endless supply of cheap fuel, has reached its limit of growth. The titans of Wall Street and their puppets in Washington D.C. have wrung every drop of faux wealth from the dying middle class. There are nothing left but withering carcasses and bleached bones.

The impact of this retail death spiral will be vast and far reaching. A few factoids will help you understand the coming calamity:

There are approximately 109,500 shopping centers in the United States ranging in size from the small convenience centers to the large super-regional malls.
There are in excess of 1 million retail establishments in the United States occupying 15 billion square feet of space and generating over $4.4 trillion of annual sales. This includes 8,700 department stores, 160,000 clothing & accessory stores, and 8,600 game stores.
U.S. shopping-center retail sales total more than $2.26 trillion, accounting for over half of all retail sales.
The U.S. shopping-center industry directly employed over 12 million people in 2010 and indirectly generated another 5.6 million jobs in support industries. Collectively, the industry accounted for 12.7% of total U.S. employment.
Total retail employment in 2012 totaled 14.9 million, lower than the 15.1 million employed in 2002.
For every 100 individuals directly employed at a U.S. regional shopping center, an additional 20 to 30 jobs are supported in the community due to multiplier effects.

The collapse in foot traffic to the 109,500 shopping centers that crisscross our suburban sprawl paradise of plenty is irreversible. No amount of marketing propaganda, 50% off sales, or hot new iGadgets is going to spur a dramatic turnaround. Quarter after quarter there will be more announcements of store closings. Macys just announced the closing of 5 stores and firing of 2,500 retail workers. JC Penney just announced the closing of 33 stores and firing of 2,000 retail workers. Announcements are imminent from Sears, Radio Shack and a slew of other retailers who are beginning to see the writing on the wall. The vacancy rate will be rising in strip malls, power malls and regional malls, with the largest growing sector being ghost malls. Before long it will appear that SPACE AVAILABLE is the fastest growing retailer in America.

The reason this death spiral cannot be reversed is simply a matter of arithmetic and demographics. While arrogant hubristic retail CEOs of public big box mega-retailers added 2.7 billion retail square feet to our already over saturated market, real median household income flat lined. The advancement in retail spending was attributable solely to the $1.1 trillion increase (68%) in consumer debt and the trillion dollars of home equity extracted from castles in the sky, that later crashed down to earth. Once the Wall Street created fraud collapsed and the waves of delusion subsided, retailers have been revealed to be swimming naked. Their relentless expansion, based on exponential growth, cannibalized itself, new store construction ground to a halt, sales and profits have declined, and the inevitable closing of thousands of stores has begun. With real median household income 8% lower than it was in 2008, the collapse in retail traffic is a rational reaction by the impoverished 99%. Americans are using their credit cards to pay their real estate taxes, income taxes, and monthly utilities, since their income is lower, and their living expenses rise relentlessly, thanks to Bernanke and his Fed created inflation.

The media mouthpieces for the establishment gloss over the fact average gasoline prices in 2013 were the second highest in history. The highest average price was in 2012 and the 3rd highest average price was in 2011. These prices are 150% higher than prices in the early 2000’s. This might not matter to the likes of Jamie Dimon and Jon Corzine, but for a middle class family with two parents working and making 7.5% less than they made in 2000, it has a dramatic impact on discretionary income. The fact oil prices have risen from $25 per barrel in 2003 to $100 per barrel today has not only impacted gas prices, but utility costs, food costs, and the price of any product that needs to be transported to your local Wally World. The outrageous rise in tuition prices has been aided and abetted by the Federal government and their doling out of loans so diploma mills like the University of Phoenix can bilk clueless dupes into thinking they are on their way to an exciting new career, while leaving them jobless in their parents’ basement with a loan payment for life.

The laughable jobs recovery touted by Obama, his sycophantic minions, paid off economist shills, and the discredited corporate legacy media can be viewed appropriately in the following two charts, that reveal the false storyline being peddled to the techno-narcissistic iGadget distracted masses. There are 247 million working age Americans between the ages of 18 and 64. Only 145 million of these people are employed. Of these employed, 19 million are working part-time and 9 million are self- employed. Another 20 million are employed by the government, producing nothing and being sustained by the few remaining producers with their tax dollars. The labor participation rate is the lowest it has been since women entered the workforce in large numbers during the 1980’s. We are back to levels seen during the booming Carter years. Those peddling the drivel about retiring Baby Boomers causing the decline in the labor participation rate are either math challenged or willfully ignorant because they are being paid to be so. Once you turn 65 you are no longer counted in the work force. The percentage of those over 55 in the workforce has risen dramatically to an all-time high, as the Me Generation never saved for retirement or saw their retirement savings obliterated in the Wall Street created 2008 financial implosion.

To understand the absolute idiocy of retail CEOs across the land one must parse the employment data back to 2000. In the year 2000 the working age population of the U.S. was 213 million and 136.9 million of them were working, a record level of 64.4% of the population. There were 70 million working age Americans not in the labor force. Fourteen years later the number of working age Americans is 247 million and only 144.6 million are working. The working age population has risen by 16% and the number of employed has risen by only 5.6%. That’s quite a success story. Of course, even though median household income is 7.5% lower than it was in 2000, the government expects you to believe that 22 million Americans voluntarily left the labor force because they no longer needed a job. While the number of employed grew by 5.6% over fourteen years, the number of people who left the workforce grew by 31.1%. Over this same time frame the mega-retailers that dominate the landscape added almost 3 billion square feet of selling space, a 25% increase. A critical thinking individual might wonder how this could possibly end well for the retail genius CEOs in glistening corporate office towers from coast to coast.

This entire materialistic orgy of consumerism has been sustained solely with debt peddled by the Wall Street banking syndicate. The average American consumer met their Waterloo in 2008. Bernanke’s mission was to save bankers, billionaires and politicians. It was not to save the working middle class. You’ve been sacrificed at the altar of the .1%. The 0% interest rates were for Jamie Dimon and Lloyd Blankfein. Your credit card interest rate remained between 13% and 21%. So, while you struggle to pay bills with your declining real income, the Wall Street bankers are again generating record profits and paying themselves record bonuses. Profits are so good, they can afford to pay tens of billions in fines for their criminal acts, and still be left with billions to divvy up among their non-prosecuted criminal executives.

Bernanke and his financial elite owners have been able to rig the markets to give the appearance of normalcy, but they cannot rig the demographic time bomb that will cause the death and destruction of our illusory retail paradigm. Demographics cannot be manipulated or altered by the government or mass media. The best they can do is ignore or lie about the facts. The life cycle of a human being is utterly predictable, along with their habits across time. Those under 25 years old have very little income, therefore they have very little spending. Once a job is attained and income levels rise, spending rises along with the increased income. As the person enters old age their income declines and spending on stuff declines rapidly. The media may be ignoring the fact that annual expenditures drop by 40% for those over 65 years old from the peak spending years of 45 to 54, but it doesn’t change the fact. They also cannot change the fact that 10,000 Americans will turn 65 every day for the next sixteen years. They also can’t change the fact the average Baby Boomer has less than $50,000 saved for retirement and is up to their grey eye brows in debt.

With over 15% of all 25 to 34 year olds living in their parents’ basement and those under 25 saddled with billions in student loan debt, the traditional increase in income and spending is DOA for the millennial generation. The hardest hit demographic on the job front during the 2008 through 2014 ongoing recession has been the 45 to 54 year olds in their peak earning and spending years. Combine these demographic developments and you’ve got a perfect storm for over-built retailers and their egotistical CEOs.

The media continues to peddle the storyline of on-line sales saving the ancient bricks and mortar retailers. Again, the talking head pundits are willfully ignoring basic math. On-line sales account for 6% of total retail sales. If a dying behemoth like JC Penney announces a 20% decline in same store sales and a 20% increase in on-line sales, their total change is still negative 17.6%. And they are still left with 1,100 decaying stores, 100,000 employees, lease payments, debt payments, maintenance costs, utility costs, inventory costs, and pension costs. Their future is so bright they gotta wear a toe tag.

The decades of mal-investment in retail stores was enabled by Greenspan, Bernanke, and their Federal Reserve brethren. Their easy money policies enabled Americans to live far beyond their true means through credit card debt, auto debt, mortgage debt, and home equity debt. This false illusion of wealth and foolish spending led mega-retailers to ignore facts and spread like locusts across the suburban countryside. The debt fueled orgy has run out of steam. All that is left is the largest mountain of debt in human history, a gutted and debt laden former middle class, and thousands of empty stores in future decaying ghost malls haunting the highways and byways of suburbia.

The implications of this long and winding road to ruin are far reaching. Store closings so far have only been a ripple compared to the tsunami coming to right size the industry for a future of declining spending. Over the next five to ten years, tens of thousands of stores will be shuttered. Companies like JC Penney, Sears and Radio Shack will go bankrupt and become historical footnotes. Considering retail employment is lower today than it was in 2002 before the massive retail expansion, the future will see in excess of 1 million retail workers lose their jobs. Bernanke and the Feds have allowed real estate mall owners to roll over non-performing loans and pretend they are generating enough rental income to cover their loan obligations. As more stores go dark, this little game of extend and pretend will come to an end. Real estate developers will be going belly-up and the banking sector will be taking huge losses again. I’m sure the remaining taxpayers will gladly bailout Wall Street again. The facts are not debatable. They can be ignored by the politicians, Ivy League economists, media talking heads, and the willfully ignorant masses, but they do not cease to exist.

“Facts do not cease to exist because they are ignored.” – Aldous Huxley

TAXING THE POOR & ELDERLY TO DEATH, TO PAY BLOATED GOVERNMENT UNION PENSIONS

The morons running the state capitol of Pennsylvania – Harrisburg – already had to file bankruptcy due to their incompetent management of city finances. Now the brain surgeons running the city of Scranton have decided that dramatically raising taxes and fees on the elderly, poor population of Scranton will solve their budget woes. The government pension obligations haven’t even really kicked in yet. The required pension payments for government workers will skyrocket in the next three years. The real unemployment rate in Scranton is north of 15%. Businesses have closed. The population has declined by 7.5% since 1990. It is a decaying, dying city with only the college supporting the few remaining residents. The government drones running Scranton and other towns across PA are delusional if they think they can raise taxes and fees on aging and unemployed people with no income to pay the bloated pensions of government workers. Math is hard for idiots. Scranton will declare bankruptcy. Book it Dano.

Scranton Residents Plead for Bankruptcy vs. Higher Taxes; Different Than Detroit

City officials in Scranton Pennsylvania have ignored pleas from residents pleading for bankruptcy.

Instead, the city raised property taxes and trash fees nearly 60% and tripled rental registration fees. The city’s school district, which faced a $4-million deficit, raised taxes 2.4%. The City Council, which in 2012 passed a 5% amusement tax on live entertainment, is now discussing a 10% drink tax.

As a result, taxpayer who can are fleeing the city.

The LA Times reports For Scranton residents, bankruptcy is an inviting option

When Detroit filed for bankruptcy, hundreds of residents took to the streets to protest what they saw as a drastic approach to fixing the city’s budget problems.

But in this hilly town of 76,000 in northeastern Pennsylvania, residents have a different view of Chapter 9: They want the city to declare bankruptcy. And soon.

“The silent majority would like to see bankruptcy,” said Bob “Ozzie” Quinn, president of the Scranton and Lackawanna County Taxpayers Assn. “Basically, it’s down to a point where people cannot afford to pay the taxes and are moving out of town.”

The City Council, which in 2012 passed a 5% amusement tax on live entertainment, is now discussing a 10% drink tax. The city’s parking authority is in receivership, and it recently privatized its parking meters: The company in charge upped rates and extended meter hours to 6 p.m., which bar owner Mert Gavin says has motivated workers to skip happy hour and head home to the suburbs straight after work.

“I am one of the last two bars that’s still downtown. Tink’s is gone. Whistle’s is gone, Banshee’s is gone, Molly Brannigan’s is gone,” said Gavin, who runs Mert’s. “Do they expect I’m going to bail the city of Scranton out myself?”

The taxes are especially egregious to some because so many of the city’s residents are elderly and living on fixed incomes. The median household income in Scranton is $37,000, and nearly one-fifth of residents live below the poverty line.

The city’s financial problems were accelerated by a 2011 Pennsylvania Supreme Court decision that found that the city owed its police and firefighters unions back pay — about $21 million. The settlement money became due in 2013, but the city bickered over how to come up with the funds for so long that Moody’s warned in November that Scranton faced the threat of default.

“It’s been nonstop. They raised the water fees, the electric, the gas,” said Richard Laytos, a Scranton native who moved back to the city to retire in 1997 after 44 years in New Jersey.

Gary Lewis, who once ran a blog, scrantonisbroke, that urged city leaders to consider bankruptcy, took a drastic step when they failed to do so: He moved out of the city where he’d spent his whole life.

“I did the math — realized how much it was costing me to live in the city,” said Lewis, who now lives in Indiana, where he says he makes $2,500 more a year because of lower taxes. “That’s the story of my generation. There’s a lot of kids like me, who grew up, went to college at Scranton, but they turn 22 and move out of the city, and they don’t move back because it’s not a financially attractive proposition.”

bankruptcy won’t solve the city’s financial woes, said John Judge, president of the local firefighters union. “It’s a horrible idea — you take local control out of the hands of policymakers, and put it in some judge’s hand,” he said.

Neither the city’s new mayor nor his predecessor, Chris Doherty, returned calls for comment, but former City Council President Janet Evans said she and Doherty had been determined to avoid bankruptcy.

“We are in a different situation than Detroit,” she said. “We were willing and able to do everything within the scope of our authority to continue the recovery of the city of Scranton until it sits once again on sound financial ground.”

My Thoughts

Officials in city hall are either complete financial-morons, beholden to the unions, or beholden to their own pension plans that would take a hit if the city declared bankruptcy.

I suspect a combination.

Different Than Detroit

“We are in a different situation than Detroit,” says former City Council President Janet Evans.

Indeed.

Detroit is better off.

In bankruptcy, Detroit has a chance to dump union contracts and onerous pension promises. Detroit may have hit bottom.

The economic-jackasses in Scranton are going to extract every ounce of blood they can from taxpayers, then eventually declare bankruptcy anyway.

Mike “Mish” Shedlock
http://globaleconomicanalysis.blogspot.com

SHOCKING NEWS

Who coulda predicted this development? I hate to tell the new CEO, who was the old CEO, before he was replaced by another CEO, that 33 stores ain’t gonna cut it. He should have added a zero to the 33. That would be their only hope. This piece of shit is going down in flames.

The Wall Street shysters will be telling you to buy the stock tomorrow on this wonderful news, just like they told you to buy it at $40 a few years ago.

Next up. Sears will be announcing they are closing 50 to 100 stores as they reposition themselves for long term growth. And the beat goes on.

Ghost Malls get spookier by the day.

The Blistering Recovery Continues: Week After Macy’s, JC Penney Fires 2000, Closes 33 Stores

Submitted by Tyler Durden on 01/15/2014 16:14 -05000

A week ago, Macy’s fired 2500 and announced the closure of five stores. Moments ago, the company which we have been warnings since late 2012 is a meltin ice cube that ends with bankruptcy, JCPenney, which a week ago provided the following glib summary “JCPenney reported today that the Company is pleased with its performance for the holiday period“, turns out was merely joking and just echoed the Macy’s sentiment, announcing the termination of some 2,000 jobs and the closure of 33 stores.

JCPenney today announced that as part of its turnaround efforts, the Company will be closing 33 underperforming stores across the country in order to focus its resources on the Company`s highest potential growth opportunities.

These actions are expected to result in an annual cost savings of approximately $65 million, beginning in 2014. In connection with this initiative, the Company expects to incur estimated pre-tax charges of approximately $26 million in the fourth quarter of fiscal 2013 and approximately $17 million in future periods.

Remaining inventory in the affected stores will be sold over the next several months, with final closings expected to be complete by early May. The closings will result in the elimination of approximately 2,000 positions. Eligible associates who do not remain with the Company will receive separation benefits packages. Meanwhile, the Company is continuing its plans to open a new store location later this year at the Gateway II development in Brooklyn, N.Y.

“As we continue to progress toward long-term profitable growth, it is necessary to reexamine the financial performance of our store portfolio and adjust our national footprint accordingly,” said Myron E. (Mike) Ullman, III, chief executive officer of JCPenney. “While it`s always difficult to make a business decision that impacts our valued customers and associates, this important step addresses a strategic priority to improve the profitability of our stores and position JCPenney for future success.”