In honor of Sears, JC Penney, Radioshack, and all the other future retail bankruptcies.
This was a Pizza Hut
Now it’s all covered with daisies
you got it, you got it
I miss the honky tonks,
Dairy Queens, and 7-Elevens
you got it, you got it
And as things fell apart
Nobody paid much attention
you got it, you got it
This was a discount store,
Now it’s turned into a cornfield
you got it, you got it
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.
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.
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.
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.
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:
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.
You gotta love these corporate douchebags and the Wall Street shysters fleecing muppets. The headlines are screaming about how JC Penney exceeded expectations. The Wall Streeters are pumping the stock up by 10% after hours to lure in some muppets, before selling tomorrow.
JC Penney puts out a 500 word earnings release that doesn’t include an income statement or a balance sheet. Just a bunch of propaganda about a glorious future. After 480 words of fluff and bullshit, they wait until the last sentence of the press release to admit they lost $352 million in one quarter. Here is a company on track to lose over $1 billion for the third fucking year in a row and the Wall Street scum are telling you to buy the stock.
Propaganda and storylines will not keep JC Penney from going bankrupt.
Here’s the reality check:
2007 1st Qtr Sales – $4.35 billion
2014 1st Qtr Sales – $2.80 billion
You aren’t reading that wrong. These bozos are crowing about a 6.2% comparable store sales increase that leaves their sales 36% BELOW where they were SEVEN years ago. They also had a profit of $400 million in the 1st quarter of 2007.
Jim Cramer says buy. This is a can’t miss growth story. BUY BUY BUY
(Thomson Reuters ONE via COMTEX) — Same Store Sales Up 6.2 Percent
First Quarter Highlights:
– Same store sales increase 6.2%, exceeding guidance; second consecutive quarter of growth
– Gross margin improved 230 basis points from same quarter last year
– SG&A savings of $69 million; 490 basis point improvement from last year
– New upsized credit facility further strengthens Company’s financial position
– Opened 30 new Sephora inside JCPenney locations, bringing total to 476
PLANO, Texas – (May 15, 2014) – J. C. Penney Company, Inc. JCP+15.81% today announced financial results for its first quarter ended May 3, 2014.
Myron E. (Mike) Ullman, III, Chief Executive Officer said, “We are very pleased to report that JCPenney delivered its second consecutive quarter of comparable store sales growth, as well as continued gross margin improvement. It is clear that our efforts to re-merchandise many areas of the store and revamp our messaging to the customer are taking hold. Despite a difficult retail environment, our strong performance during the Easter holiday period and other key promotional events enabled us to deliver better than anticipated sales results. We expect to carry this momentum into the second quarter as we continue to position the company for long-term profitable growth.”
Financial Results
For the first quarter, JCPenney reported net sales of $2.80 billion compared to $2.64 billion in the first quarter of 2013. Same store sales increased 6.2% and improved sequentially each month within the quarter.
The Company said that, going forward, it will simplify its same store sales calculation to better reflect year-over-year comparability. Certain items, such as sales return estimates and liquidation sales, will now be excluded from the Company’s same store sales calculation. Under this new methodology, comparable store sales in the first quarter rose 7.4 %, which includes online sales that grew 25.7 % over the same period last year. For the full year, the Company expects the new sales reporting methodology to have a 10 to 20 basis point impact.
Women’s and Men’s apparel, Home, and Fine Jewelry were the Company’s top performing merchandise divisions in the quarter. Sephora inside JCPenney also continued its strong performance. Geographically, all regions delivered sales gains over the same period last year with the best performance in the western and central regions of the country.
For the first quarter, gross margin was 33.1 % of sales, compared to 30.8 % in the same quarter last year, representing a 230 basis point improvement. While better than last year, gross margin was negatively impacted by an increase in clearance sales as a percentage of total sales in February and March, as well as negative clearance margins. Gross margin improved sequentially throughout the quarter, and the clearance sales mix returned to historic levels by quarter end.
SG&A expenses for the quarter were down $69 million to approximately $1.01 billion or 36.0 % of sales, representing a 490 basis point improvement from last year. These savings were primarily driven by lower corporate support costs, advertising and improved credit income.
Operating income for the quarter was a loss of $247 million which represents a 49.2 % improvement over last year. For the first quarter, the Company incurred a net loss of $352 million or ($1.15) per share.
It’s too bad 98% of the people in this country are math challenged. The storyline of retail recovery is false. It will continue to be false based on pure mathematics and demographics. The fact is that REAL retail sales, adjusted for population growth, are at the same level as 1999 and still 5.3% below the debt induced peak in June 2005. That doesn’t sound catastrophic until you take into account that delusional retail CEO’s across the land added 3 BILLION square feet of new retail space since 1999, bringing total retail square footage up to 15 BILLION. That is approximately 50 square feet of retail space per person in the U.S.
Retailers judge themselves upon sales per square foot. If you add 25% more square feet and achieve the same level of sales, guess what happens to profits? When you see the MSM crowing about Home Depot’s tremendous sales and profits, they fail to mention that they are still lower than they were in 2007. Retail sales have peaked for this cycle and are headed down. With 10,000 Boomers per day turning 65 years old with no savings, the future for retail gets bleaker by the day. There have been quite a few announcements of store closings by major well known retailers in the last few months, but we are only in the 2nd inning of this ball game. It won’t be over until the 15 Billion square feet is whittled down to 10 Billion square feet. If you were thinking of buying JC Penney, Sears or RadioShack stock, you might want to think twice about it.
The best investment today would be in the company that makes SPACE AVAILABLE signs.
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
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!!
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.
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.
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 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:
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.
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:
And that, in a nutshell, is all you need to know about our criminal markets.
“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.
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:
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
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.
Submitted by Tyler Durden on 01/15/2014 16:14 -0500
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.”
What can one say but: this is just the kind of recovery that justifies an S&P500 at all time highs.
Investors initially cheered… but now not so much…
So the stock market is at new all-time highs. GDP is at an all-time high, well above 2007 levels. Unemployment has supposedly fallen from over 10% in 2009 to only 7.3% today. Corporate profits are at all time highs. Wall Street bonuses are at all-time highs. The talking heads on CNBC and the rest of the MSM tell me that things are great. Interest rates, at least for some people and banks, are at record lows. Bernanke pumps $2.5 billion of heroin into the veins of Wall Street on a daily basis.
So why so glum average Americans? It seems average Americans plan on spending 10% less for Christmas gifts this year than last year. Not only that, but they are spending 19% less than they spent in 2007 and 18% less than they spent in 1999. Didn’t you people get the message? Stop with the goddamn austerity, whip out that credit card, and buy Chinese shit you don’t need with money you don’t have. Don’t you realize Wall Street bankers and mega-retailer CEOs are depending on your recklessness materialism to generate their $7 million bonuses?
It seems the 99% are not cooperating with the 1% plan for economic recovery. Maybe they are little depressed because their health insurance policy just got cancelled and their new Obama policy is going to cost 40% more. Maybe it is the $1,000 less the average household has to spend this year versus last year because the 2% Social Security tax reduction expired. Maybe it is because they lost their $80,000 per year job at Merck and are now working at the Dunkin Donuts across the street for $9.00 per hour – but they get free donuts at the end of the shift. Maybe it’s the fact that the real median household income is 10% below the level of 1999.
You see, reality is a bitch. Your owners can prop up the stock market and spew propaganda on the corporate media outlets, but they can’t create wealth for you. The average American is spending less because they have less. It really is that simple. And the less they spend, the more retailers will suffer. The JC Pennys, Sears, Radioshacks, Barnes & Nobles, Best Buys and many more will be forced to shutter stores, fire employees and in some cases file bankruptcy. You can smell the desperation among the mega-retail conglomerates. They over-expanded based on the delusional belief that this credit based fantasy could go on forever. They will pay the price.
Opening stores on Thanksgiving will not save their sorry asses. They fucked up and they will pay the piper. It’s a zero sum game. The average American is running on empty. The Wall Street/Hamptons crowd can not sustain the nation with their extravagant spending. I love the smell of desperation in the morning. It smells like bankruptcy and disgrace for delusional retail CEOs.
I hate saying I told you so. No I don’t. I love saying I told you so. I wrote my first article about JC Penney being a future bankruptcy in early 2012.
http://www.theburningplatform.com/2012/05/15/j-c-penny-bug-meet-windshield/
I’ve written multiple posts since then.
The Wall Street shysters have continued to tout this piece of shit as a buy the whole way down. The stock is now down 45% on the year and down 75% since I wrote my first article warning of their demise. They are done. Their suppliers will not supply them with the inventory they need for Christmas unless they get paid up front. JC Penney is hemorrhaging cash. They don’t have it. They will be filing for bankruptcy shortly after their horrible holiday sales hit the presses.
There will be 1,100 vacant rotting hulks in dying malls across America. Maybe they can be converted into Soup Kitchens R Us. That is where the 150,000 JC Penney employees will be going after they get fired in the next six months. The fat lady is belting out a tune.
Submitted by Tyler Durden on 09/25/2013 10:39 -0400
Here’s why: 
As we reported in detail yesterday, as part of Goldman’s Buy JCP CDS reco, the firm conducted this recovery analysis on the unsecured bonds. Its best case recovery on the unsecureds: 65% (and 13% in the worst case). Translation: equity is “impaired” in pretty much any case.The JC Penney farce is approaching its tragic ending. They will be joining Montgomery Ward and hundreds of other defunct retailers in the relatively near future. I predicted this the day they hired Ron Johnson. One year ago they reported 2nd quarter results that were absolutely horrific. The Wall Street assholes cheered. The stock soared that day. The retards who call themselves investment analysts drove the stock from $20 to $30 within a month. Their thesis was that it couldn’t get worse. As usual they were wrong. The stock traded at a 13 year low today, down 60% since the Wall Street crowd said buy last Sept.
The new CEO, who was the old CEO, is now going to be the ex-CEO again. They have no top management in place. The stores are a mess. Their suppliers won’t supply without COD. They are burning through millions in cash every day. Their balance sheet is a disaster. Last year their 2nd quarter same store sales were NEGATIVE 22%. That is almost impossible to accomplish. They report earnings on the 20th. I’ve seen estimates that same store sales have fallen another 16%. OMG!!! This is a death spiral.
The new CEO should have experience with liquidation plans. JC Penney will be filing bankruptcy. They will be closing hundreds, if not all of their stores. No one will notice. Sears and Kmart will follow. The long emergency methodically rolls on. Luckily, all those vacant rotting store fronts won’t result in the Too Big To Trust Wall Street banks writing off the loans to mall developers. The landlords will pretend they are getting rent and the banks will pretend the loan payments are being made. Accounting is awesome.
Submitted by Tyler Durden on 08/09/2013 11:18 -0400
While outlining the ridiculous spectacle of the last 24 hours news flow on JCPenney is useful for some, a step back to view this charade for what it is – a hedge fund manager massivley under-water, a company careening into bankruptcy, a board desperate to show it has any relevance, and a most senior creditor (Goldman Sachs) chomping at the bit to securitize the firm’s T-Shirts and small appliances… the entire ‘bounce’ from yesterday has been retraced as Ackman and JCP’s board fling insults at each other… JCPanic has been downgraded to JCPandemonium… on its way to JCPoof…
First this…
Then this…
and now this…
Bear in mind that credit markets throughout all of this have been serially unimpressed… 5Y CDS now at new record highs 1232bps (equivalent running) or ~70% probability of default…
I guess that turnaround touted by the idiots that pass for Wall Street analysts isn’t going well. Poor Ron. I wonder whether his severance package was $3 million or $4 million for destroying a 100 year old retailer in 15 months. That lear jet commute from Palo Alto every Monday morning must have been a real bitch. His acumen in deciding not to move to Plano Texas proves how smart this douchebag really is. Maybe Apple will rehire him so he can work his magic in their Apple stores.
Next stop – Bankruptcy.
Submitted by Tyler Durden on 04/08/2013 17:06 -0400
So much for the “transformation” CEO. As per CNBC, he “is out”:
At least he lasted just a bit longer than the former JCP president Mike Francis, who came, saw, collected $10 million, and quit nine months later.
Why the stock is soaring after hours on this latest admission of defeat is beyond us. If anything, this means JCP is closer to filing than ever as the last bastion of hope at the distressed retailer is now gone.
Ron Johnson is the gift that keeps on giving. One of his biggest stockholders – Vornado Realty – sold 10 million shares at a price 50% below when they purchased the shares. That sounds like a vote of confidence. Johnson is also being sued by Macy’s for signing an illegal agreement with Martha Stewart. If he loses, there will be tons of empty shelves in JC Penney stores across the land. Sales are still plummeting. Of course, there are still a couple of Wall Street shills telling you it’s the best time to buy. Now Johnson fires 2,200 dedicated employees as he still collects his multi-million dollar pay package and commutes by a company Jet from his home in San Francisco.
This douchebag has to go. There is only one employee that needed to be fired and his name is Ron Johnson. The Board of Directors of this company is a fucking joke. They hired this asshole and watched him destroy a 100 year old company in one year. This is nothing but a death rattle. Unless they fire this fucker in the next month, JC Penney will be declaring bankruptcy within 12 months.
 |
By MARIA HALKIAS
MARIA HALKIAS The Dallas Morning News
Staff Writer
Published: 06 March 2013 11:17 PM
And Penney employees found out Wednesday that things can get worse. About 2,200 people were laid off in stores and district offices.
Some bullish analysts changed their tunes Wednesday, and the stock price has lost 35 percent of its value in just the last five trading days. Former Penney chairman and CEO Allen Questrom said the board needs to act, adding that chief executive Ron Johnson should be replaced.
The third week of a trial over a contract dispute with competitor Macy’s over Martha Stewart merchandise continued in a reporter-packed New York courtroom. The trial may be adjourned until April because of scheduling conflicts.
The Plano-based department store chain’s new low points included Tuesday’s news that 10 million shares of stock were sold by a major shareholder who, oh yes, happens to be a board member.
Wednesday, Penney’s stock price fell 53 cents to hit a 52-week low of $14.43 a share.
All that follows last week’s news that Penney lost almost $1 billion and had a sales decline of a whopping $4 billion, falling to $13 billion in 2012.
Most of Wednesday’s staff cuts happened in about 100 stores that had significant sales declines last year, and the employee count will be reduced to match each location’s new level of business, said spokeswoman Daphne Avilla.
Administrative and back office jobs were cut across the chain of 1,100 stores and in 55 district offices.
In stores, department management duties are also being consolidated.
Staff cuts “will not impact the store experience,” Avilla said. “We’re not cutting folks on the floors. And our hope is to later be in a position to build back up our workforce.”
Penney’s stores, which range from under 65,000 square feet in small towns to more than 200,000 square feet in major malls, employ from 50 to 400 people per location.
Martha Stewart trial
Finally, on Friday, even if the trial isn’t over, New York Supreme Court Justice Jeffrey Oing will decide what sheets and towels Penney can sell starting in May when the retailer plans to have new home departments ready for shoppers. Martha Stewart designed products in a few categories that were believed outside her agreement with Macy’s.
Last summer, the judge issued a temporary order that prohibited Penney from selling Martha Stewart-branded products in the key home categories of bed, bath, tabletop and cookware. Instead, Penney developed products in those categories with Stewart’s help under the Everyday brand.
On Friday, Oing will rule whether Martha Stewart Living’s involvement in designing that product violated the Macy’s contract.
Penney is developing alternate plans and will make a statement after the judge rules, Avilla said.
Questrom, who spent five years in the early 2000s at Penney pulling it out of years of missteps, is frustrated that the board hasn’t forced Johnson to take his ideas to Middle America more slowly and test new merchandise and pricing.
“All these people are worried about Johnson keeping his job. It’s crazy,” Questrom said in a phone interview Wednesday. “What about all these Penney employees?
“It’s an old company, and he’s putting the nails in the coffin if they don’t start making some changes. There’s no reason to wait another quarter.”
The board “has allowed this to go on too long,” Questrom said. “I have to believe they are looking for his replacement.”
Silence
Penney board chairman Tom Engibous, the retired chairman and CEO of Dallas-based Texas Instruments Inc., didn’t respond to a request for comment. Other board members also declined to comment.
Johnson declined a request for an interview as well.
One could say that board member Steven Roth, chairman of Vornado Realty Trust, commented on Johnson’s performance and Penney’s prospects Tuesday when he sold 10 million shares of Penney stock. Roth and Pershing Square Capital founder William Ackman joined the board in 2011 after they amassed a 26 percent stake in Penney. Ackman has been Johnson’s most vocal supporter on the board but hasn’t commented this week.
On Wednesday, some analysts who had supported Johnson’s plans to turn Penney into a collection of mini shops within stores and adopt an everyday-low-prices strategy downgraded Penney.
Citi’s top retail analyst, Deborah Weinswig, visited Plano on Tuesday and met with Johnson and other top executives. She concluded that Penney will either continue limping along and spending money or the company will be sold and/or “senior leadership” will leave.
She downgraded Penney to a neutral rating from a buy and titled her report: “Wish I knew then what I know now.”
“We believe the potential for asset sales, a private takeover and senior leadership changes could support the shares and limit further downside from here,” Weinswig wrote.
Oppenheimer analyst Brian Nagel downgraded Penney stock after concluding that the company could go through all of its $900 million in cash this year and continue to post losses.
“The market is unlikely to afford JCP any benefit of the doubt until clear evidence of a turn emerges,” Nagel wrote in a report.
Johnson promised a year ago that Penney’s transformation would be self-funded, but asset sales were necessary last year and will likely continue, analysts said. JPMorgan analyst Matthew Ross said Penney will probably have to borrow money to keep building new shops.
I feel like Dirty Harry the way I’ve been gunning down stinking retailers today. And now I’ve got Ron Johnson, the worst retail CEO in history, laying on the ground with my 44 Magnum pointed at his fat ego inflated head. And I’m itching to pull the trigger.
Ron Johnson has been the CEO of JC Penney since November 2011. In the space of 14 months this douchebag has single-handedly destroyed a retailer that has been around for over 100 years. His stunning incompetence is breathtaking to behold. I worked for a horrible retail CEO at IKEA named Pernille Lopez. She was as dumb as a sack of hammers, but she was unable to destroy IKEA. Johnson arrived at JC Penney with his Apple Ego and $400 million fortune and proceeded to prove that a retard could have done a better job by throwing darts at a list of ideas to improve the company.
It is almost incomprehensible what he has been able to accomplish in one year on the job. Here is a link to their results.
http://finance.yahoo.com/news/j-c-penney-company-inc-213101438.html
Here is the verdict:
Ron Johnson is a disgrace. JC Penney is a public company and its Board of Directors are a disgrace. This asshole should be fired immediately. They are paying this motherfucker millions to drive this company into the ground. It seems his free kids haircuts on Sundays didn’t turn things around. To show you what a fucking ego he has, he didn’t even move to Plano Tx when he took the job. He still lives in San Francisco and commutes several times a week in a corporate jet.
After concluding the worst year ever by a retailer of this size, here is what this rocket scientist had to say:
“We have accomplished so much in the last twelve months. We believe the bold actions taken in 2012 will materially improve the Company`s long-term growth and profitability.”
Delusional doesn’t come close to describing this asshole. The hubris of making a statement like that is appalling. He should be on his fucking knees apologizing to the employees and few remaining customers for the atrocious management and dreadful decisions he has made. But you will hear none of that. He doesn’t give a fuck about the thousands of employees who will lose their jobs when this disaster sinks to the bottom of the retail graveyard. He is responsible for 159,000 employees. Most or all will lose their jobs. This fucker will get a $10 million severance package and fly off to his gated estate in Silicon Valley. I love watching the Wall Street dickheads who have continually come out with positive reports on this dog of a company be proven to be shills and shysters.
You can checkout my previous thoughts about Mr. Johnson here:
May 2012 – http://www.theburningplatform.com/?p=34521
August 2012 – http://www.theburningplatform.com/?p=38725
September 2012 – http://www.theburningplatform.com/?p=40416
November 2012 – http://www.theburningplatform.com/?p=43752
December 2012 – http://www.theburningplatform.com/?p=45560
I’ve decided that my new theme song is from my boys the Black Keys. My predictions make me a Lonely Boy but when I’m right, I gots to dance.