Morgan Stanley reiterates its dour Underweight rating on J.C. Penney (JCP), noting the retailer...

Morgan Stanley reiterates its dour Underweight rating on J.C. Penney (JCP), noting the retailer is still at risk of not meeting FY13 estimates with its business on shaky ground. JCP investors can circle February 27th on their calendar with Q4 earnings slated to be released followed by a streaming webcast with CEO Ron Johnson and CFO Ken Hannah during which the rah-rah rhetoric may be challenged more deeply by analysts.

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Comments (4)
  • karmike
    , contributor
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    In my opinion there will be opportunity to take advantage of "blips" in this stocks price in 2013 caused by overreaction to small same store sales increases following what I think will be a disaster in q4 sales and profits. It will look like the program may be working, but those who know retailing know that it will be temporary.....huge merchandising problems remain and the customer base has departed! I see low teens after the 27th....may be a buy there for short term gain before 4q 2013.
    12 Feb 2013, 09:00 AM Reply Like
    , contributor
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    "huge merchandising problems remain and the customer base has departed!"


    There's a tendency for people to not look at the big picture of this transformation. (I'm not picking on you, karmike -- this narrow view is pandemic.)


    Basically JCP saw it's place and position dwindling before Ron Johnson. They hire Ron to completely rebirth JCP and turn it from desperately dull to hopefully WOW.


    There are two ways this could be done --


    1. The way they are doing it now.
    2. Shutter every JCP, layoff almost every employee, start again.


    Right? Option 2 could have occurred. Where JCP gave up, dropped its brand, and rebirthed itself a year later as a new store, new name, new employees, new everything.


    If they had done that -- what would the Q4 sales been like? That's right: zero. How many customers would have departed if they had shuttered the stores for a year? That's right: all of them.


    I know what I'm discussing has GRIM stock market repercussions -- since no company can simply shut its doors for a year. But it seems to be that no one speaks of this transformation from this perspective, which is --


    -- of course there are fewer customers in the middle of a transformation. Of course there's customer confusion on who should be shopping at JCP and who probably shouldn't. How could there not be -- compared to the far worse alternative of shuttering for a year or two and reopening a brand new store?
    12 Feb 2013, 05:01 PM Reply Like
    , contributor
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    While non-shoppers of JCP ring hands and talk about numbers, brand new JCP product is selling out.


    Go to my username's URL and read the new post.
    12 Feb 2013, 09:05 PM Reply Like
  • karmike
    , contributor
    Comments (190) | Send Message
    There was a third option, and a better one than they are doing. They should have taken several stores, or a district and TRIED his plan before rollout nationwide.


    I don't expect non- retail people to understand merchandising, but you have to trust me on this one, this company cannot compete because their merchandising staff in Plano does not understand how to do it.....I'm talking the new shops and the old sizes, no colors, out of stocks everywhere in needed sku's . I've watched these boards, and the retail people all know what I'm talking about. There is one other problem they cannot overcome, and that is the name on the building.....take a poll of fashion forward customers, and you would find it would take an act of congress to get them to go into the door of a jcp......and we all know that's not going to happen!
    13 Feb 2013, 08:44 AM Reply Like
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