Seeking Alpha

J.C. Penney readies to pull some levers

  • J.C. Penney (JCP) is reportedly leaning toward raising between $750M to $1B in a new equity raise, although other avenues of raising capital are still on the table.
  • Yesterday, a pair of negative research notes took a heavy toll on JCP shares to take them below the $10 mark for the first time since 2000.
  • Cash burn is one of the most pressing issues at J.C. Penney with the retailer forecast to to consume $1.1B in cash during the first three quarters of fiscal 2014. If holiday sales miss the mark of analysts, the situation becomes even more dire.
From other sites
Comments (2)
  • hansonmt
    , contributor
    Comments (14) | Send Message
     
    Speculation aside, I follow the company's developments and offerings closely, I can say as I walked a high profile store yesterday that the merchandise mix and depth of saleable items has improved remarkably over comparisons to the last 18 months. New Disney offerings are being responded to by the customer and a new infant toddler brand, "Giggles" looks excellent. Even forward offerings such as Joe Fresh now contain deeper offerings of sales styles with depth of ownership. The Saint John's Bay shop for men is excellent with core offerings enhanced by complementary saleable fashion pieces similar to North Face, etc.

     

    After all the opinions and politics, it is the customer who will vote and decide if the company's is viable. While they still offer some of the better fashion concepts from the Johnson era, they have clearly moved the offerings back to a more saleable, profitablle core offering.

     

    While it would be wrong to consider previous customers to return in groves, they should begin to repatronize the retailer. I would look for improving trends in Q4 and more accelerated improvement in trend for Qtrs 1 and 2 in 2014.

     

    Last I see some of the people who already have large positions moving them closer to the 10% stake that is allowable under the poison pill constraints. These sophisticated investers are likley not willing to lose their initial investments on weak stomachs, and have adequate resources and the foresite to take on the additional risk.

     

    My best bet is it will be a rocky road, but the company will survive and reestablish itself as a destination for moderate income families, with a good balance of fashionability added to the core offerings.

     

    I would suggest some of the key pundits and analysts who focus on the financials, go walk a good store and get a perspective from the target customer's viewpoint.
    26 Sep 2013, 08:24 AM Reply Like
  • pablo44
    , contributor
    Comments (3) | Send Message
     
    return in "groves" ? yeah that's it groves not droves!!!!!!!!!!!!!!!
    26 Sep 2013, 12:41 PM Reply Like
DJIA (DIA) S&P 500 (SPY)
ETF Tools
Find the right ETFs for your portfolio:
Seeking Alpha's new ETF Hub
ETF Investment Guide:
Table of Contents | One Page Summary
Read about different ETF Asset Classes:
ETF Selector