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Admittedly, I've been bearish on J.C. Penney (NYSE:JCP) for the better part of a year now. Some would argue that my 2013 magnum opus was my editorially acclaimed "J.C. Penney is Dying Like a Crazy Headless Chicken".

It's been quite the war for J.C. Penney - a retailer who has struggled to keep its head above water in the face of horrible sales, a Board of Directors dust up, a musical chair of CEOs, and major shareholder dilution.

The company is down nearly 63% in the last twelve months alone.

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One of my past arguments I had against the company was when they resorted to begging for business upon Myron Ullman being re-appointed as CEO. Today, it looks like they may be trying to top that.

When I was growing up in the Midwest, we had several electronic "big box" stores, before the days of the true big box stores. There was no Amazon (NASDAQ:AMZN) or Tiger Direct, and in the 1970's when you wanted to buy a television, VCR, or camcorder, it required a family trip in the old station wagon out to the local electronics store.

I used to be fascinated by these stores, as I grew up loving technology and electronics. I would wander around, trying all the floor units of the different appliances and - in the midst of that - catch the customer interactions of a local salesman who was known around my home town simply as "the psycho." The man was chubby and hostile, constantly drenched in sweat, clip on tie falling off, forcing products onto scared customers and frantically bouncing around the store like an excited Chihuahua. His voice had one volume level: full out screaming, and his body odor as a product of his sweat used to follow him around the floor of the store.

He was eager to recommend products - any products - to any customer that would listen - at any time. Half the time I wasn't even sure that this guy knew what he was even selling, just that he wanted to get people in and out as quickly as possible. It was horrifying and frightening to watch as a naive 11 or 12 year old child.

Unsure of why the guy was always so hyper, I struck up a conversation with my mother about it one day. She explained to me this thing called "commission" - which is how employees at this business were paid. I will forever equate this hostile psychopath from the electronics store with commission sales. And, it's not unlikely that most people have had a similar experience with some type of commission sales.

Ever since then, I've done well growing up to notice when an employee is and is not working on commission if I'm in their establishment. Granted, it's not always a bad thing and it forced employees to be attentive (if they want to make money). But, most of the time, it results in customers feeling pushed around. As a matter of fact, it was one of my recent complaints about RadioShack (NYSE:RSH) when it became horribly clear to me on my last trip in there that the sales associate would have given a kidney to get me to buy a cell phone there.

That was a story I remembered when I glanced at the news feed for JCP today. It was reported mid-day today on Seeking Alpha that J.C. Penney is starting to re-implement commission in their workforce:

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While some may see this as a positive for the company, who needs to save money wherever they can, it's ultimately going to be a loser for them.

Yes, the pros are as follows: it's going to get salespeople to drive sales and it'll cut costs from the corporate angle. I agree that the staffing at JCP needs to be addressed, because the stores sometimes seem deserted - but, not like this.

However, the cons are evident as well:

  1. J.C. Penney is not a store where customers come in to get pushed around or even "helped". Most JCP customers come in, browse, and already know what they're looking for.
  2. J.C. Penney employees that are struggling to sell items are likely to start to resent the company if it starts to take away guarantees of a steady pay.
  3. It does absolutely nothing to change J.C. Penney's brand image for the positive. Retail commission is an archaic way of doing business - even Ron Johnson understood that. That's why, to this day, Apple retail store employees don't make commission on sales.

QTR's take : Firmly bearish

This move represents bottom of the barrel idea fishing.

There's nothing about commission sales that's going to put any prestige or credibility back behind the J.C. Penney name - and those are some of the items they need the most right now. J.C. Penney has reinvested in its old CEO with old ideas - a path that is likely to continue to lead the retailer to a slow, ugly demise.

Best of luck to all investors.

Source: J.C. Penney: 'Desperation' Is A Stinky Cologne