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Jan Rogers Kniffen

Jan Rogers Kniffen
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  • Tuesday Morning Has Reached 52-Week Highs; More Room To Fall [View article]
    I do not trade any retail stocks, I analyze them for a living. Since the first of September I have visited 8 TM stores in PA, and another 3 in NJ. I realize that is still a very small sample of the 810 stores and may not be representative. (I have regularly visited TM stores for the past two years.) What I saw in the new floor set in the 11 stores I visited looks like a most remarkable turnaround. The "seasonal" home d├ęcor items up front are vastly improved. The aisle that I can only describe as "Cost Plus/World Market meets Tuesday Morning" is quite good. Housekeeping is much improved. The bad apparel that was never a good idea at TM is gone. The stores look like stores in the early stage of a merchandising turnaround. Describing this as merely a cost cutting fix is very unfair. Certainly the jury is still out, but when a store bottoms at 90 bucks a square foot or so, recovers to 110 dollar a square foot or so, and then starts significantly improving the merchandise assortment and housekeeping, and its comparable competitors run 300 bucks a square foot, there could be a lot of good things yet to happen. Being short here could be very painful.
    Sep 27 07:47 AM | Likes Like |Link to Comment
  • With J.C. Penney Struggling, Where Will It Be In 2020? Foreclosed? [View article]
    I considered taking this article on item by item, and then I decided it was hardly worth the time at my rate of pay. In brief, this is one of the least useful, least insightful articles I have read re JCP, maybe re retail in general. JCP is good for $14.65 in the near future. That is certainly upside enough to own them for anyone reading this post, and the writer of this article does not even seem to doubt that.
    Sep 18 08:55 PM | Likes Like |Link to Comment
  • J.C. Penney: Saying Sayonara To The Bankruptcy Discount [View article]
    What, you could not just say $14.65 like I have, and reevaluate at that point? C'mon, man, take a position...even if it is wrong. I am frequently wrong, but never in doubt...$14.65.
    Sep 1 11:01 AM | 3 Likes Like |Link to Comment
  • Don't Be Surprised When J.C. Penney Blows It Away On Gross Margins [View article]
    Interesting question. I am only really looking at the next couple of years. Remember, when I got in the business there were about 150 department store names even though the consolidation had begun with Federated, Associated, May Department stores, Allied Stores and Mercantile owning many of the names after the first wave of consolidation. In those days we did not even consider Sears or Penney a department store. They were mass merchants. And, Kohl's was a discount department store. Today, even including Sears, Penney and Kohl's there are only a couple of hands full of department store names. So, yes, I think that Penney is recovering nicely from the debacle that Ron Johnson instituted. But, it is not like Penney was running all that well when Ron arrived. After all, that is why he arrived. And, actually, I thought Ron's concepts were brilliant. I was just sure that they were not going to work in an 1100 store chain with an established clientele before the company would go broke...and I was right. Mike has stabilized the business and he has a great operating CFO in Ed Record. But, Macy is a fierce competitor with a big head start. Kohl's, while wounded, is one of the great success stories in department store retailing. Thankfully, Sears/Kmart has about $14 billion in soft goods sales to surrender over time, and they are Penney's most direct competitor. So, Penney does have a runway. But, after the recovery, they are still just a "big, dumb" department store until they take the next step. Right now, we do not even know what they next step is. That does not mean that I am not optimistic about their success over the next two years...I am.
    Jul 18 04:01 PM | Likes Like |Link to Comment
  • Don't Be Surprised When J.C. Penney Blows It Away On Gross Margins [View article]
    Drawing conclusions from one visit to one store makes me crazy. I walked over 100 (I quit counting when I hit 100) JCP stores in the quarter that Ron Johnson announced Fresh Air. And, I have been walking stores professionally for 50 years, or so. When I was in management at a retailer, I was out walking stores every week, both ours and competitors...I still am, every single week, not for an hour or two, and not one store. Sure you can go in any one store at any one time and find all kinds of things not to like. It is retailing. But, I am telling you that Penney gets better in most stores with every new delivery of product. The customer service is at least as good as it has ever been. If you want to be negative based on financial leverage or competitive pressure fine, those are reasonable arguments. But, quit trying to tell me that the operations, traffic, and sales are not getting better. It simply is not true
    Jul 17 08:50 AM | 2 Likes Like |Link to Comment
  • Don't Be Surprised When J.C. Penney Blows It Away On Gross Margins [View article]
    I went negative on JCP after attending RJ's Fresh Air meeting, and stayed negative until the stock fell to the mid teens. I then got off the negative way too soon and the stock fell to five dollars. At 5 bucks I bet one of the CNBC anchors that the stock would double to 10 bucks before year end 2014. It got close and fell back. I still expect to win the bet. Penney stores look stronger with every visit I make and I am in stores every week. I think they will just continue to improve, and that gross margin will improve as well. I think that they will go cash flow positive and begin to delever late in 2015. Will that get the stock above mid teens? Hard to say.
    Jul 14 08:20 PM | 3 Likes Like |Link to Comment
  • Don't Be Surprised When J.C. Penney Blows It Away On Gross Margins [View article]
    You were in one store out of 1100 for two hours on one day out of 365 and you drew an investment conclusion?
    Jul 14 03:02 PM | 12 Likes Like |Link to Comment
  • J.C. Penney Draws The Last Arrow In The Quiver [View article]
    Gee, Raven, almost no companies "pay their debt." They roll debt, they refinance debt, they shorten or lengthen debt moving to more attractive rates. And, at some point companies like JCP that we know are, in fact, over leveraged, actually do reduce their debt load as cash flow improves. But, saying something like "if they could pay their debt, they would," just sounds petulant. Ed Record is a very talented CFO, he is doing what he can do to improve the viability of a company that was struggling mightily when he got there. And, the rating agencies and the vendors all recognize that fact. You may be right in the long run that this does not work. I think it will and that it is still a buy just as it was at $5, but there is no real argument that this latest move on debt was anything but a company whose prospects are a little better taking advantage of what the market would give them regarding their capital structure to the benefit of the equity holders.
    Jun 25 10:59 AM | 4 Likes Like |Link to Comment
  • J.C. Penney Draws The Last Arrow In The Quiver [View article]
    Having been the treasurer of a Fortune 500 retailer for 20 years (as well as SVP finance and treasurer by the end of my career) I can only say that calling this move by JCP "pulling the last arrow in the quiver" is patently wrong. All Penney did here was improve pricing and the terms on their existing deal while moving out the term. You may not like Penney, and you may not believe in the turnaround, but this action by Ed Record and his team makes Penney a better, safer bet than it was the day before the debt deal was done. It is more like Ed added an arrow to his quiver which is a longer term on his facility. Oh, and by the way, the stock did not get to $10, had it gotten to $10 instead of $9.93, I would have won my bet with CNBC anchor Brian Williams that the stock would rise from $5 to $10. Since the bet runs through year end, I still expect to win it.
    Jun 24 08:26 AM | 14 Likes Like |Link to Comment
  • J.C. Penney: Penney For Your Plotz? [View article]
    I agree with the article and comments above. (I do think a 61% COGS is probably optimistic, but that does not really change the fundamental argument.) My comment is, however, regarding Sears. The best scenario for Penney is for Sears to survive for a very long time while shedding market share and liquidating assets. An abrupt change in Sears, a bankruptcy for instance, where huge liquidations of inventory take place and where many Sears stores at the other end of the mall go dark, would cause big disruption at Penney (and a downward revaluation of Penney real estate) long before it would ever (if ever) be a benefit to Penney. Those long Penney should wish for long, painful deteriorating health for Sears...not death.
    Jun 2 01:09 PM | 4 Likes Like |Link to Comment
  • J.C. Penney: Back By Popular Demand [View article]
    I have one comment to add here. "Their raising prices to promote artificially higher percentage off sales is disingenuous at best and deceptive at worst." I have been involved in retail for 50 years, twenty of those years in department stores. The person commenting obviously has not. Mark up to mark down is the method of pricing for 80% of the retail industry (excluding Walmart), and 95% of the department store industry. It may not be the best strategy, but it is certainly the most common strategy. The most successful department store company in the history of department store retailing, Macy, uses the mark up to mark down method of pricing, identical to what is used for Penney. The only reason it is news at Penney is that Ron Johnson got rid of that methodology for a brief shining moment of retail history. I am happy to entertain complaints about Penney or the industry, but not that one.
    Mar 21 02:18 PM | 9 Likes Like |Link to Comment
  • J.C. Penney: No Bankruptcy; Target $10 On Short Covering [View article]
    I am the Jan Kniffen quoted in the article above. While I find the article interesting and entertaining, I do not see anything heroic needed for JCP to be cash flow neutral, without asset sales, for 2014. Yes, they need positive store for store comps in the mid single digit or better range, steadily improving gross margins, a little better payables leveraging, and a little better inventory turn, but all of those are within the "norms" of an improving department store. I am not playing down the risk of execution here, but it does not take heroic results, just normalization. And, JCP has just added an extremely capable retail "operating" CFO, Ed Record, that makes all of the above more likely.
    Feb 28 02:05 PM | 8 Likes Like |Link to Comment
  • Why I'm Not Concerned About Target's Security Breach [View article]
    Your points are all correct, but what I meant by shopping less "on average" is that if 97% of your customers continue to do what they have always done and 3% go elsewhere, you lose "on average" 3% of sales. That sounds small, but in a big box retailer that would be a disaster.
    Feb 13 10:28 AM | 1 Like Like |Link to Comment
  • Why I'm Not Concerned About Target's Security Breach [View article]
    I admit that I am much more concerned with Target's low ROI incursion into Canada, its low ROI implementation of REDcard, and its low ROI investment in the huge remodel program that is pFresh than I am about the data breach. And, I have not done any sort of survey of customers regarding their willingness to shop at TGT since the breach. But, remember, customers do not have to "quit shopping" at Target for the breach to be a huge disaster. All they have to do, on average, is shop "a little less" at Target. A few percentage point loss in store for store sales versus the trend is a disaster in retailing.
    Feb 10 10:43 AM | Likes Like |Link to Comment
  • Can J.C. Penney Be Saved? [View article]
    OK, I confess I love reading Retail Maven's articles on JCP, but in this case his ideas seem only marginally less insane than RJ's did. Admittedly, Penney may not make it with Mike's current strategy, but they sure as heck are not going to make it with yet another new retailing strategy at this point in the game. Some of RM's ideas are good, some of RJ's ideas were good as well, but now we live or die with Mike's view of how to get his traditional customer back. I think JCP will just get gradually better from here, avoid bankruptcy or another equity raise, and start to see nicely improved gross margins and bottom line profits, but either way, changing the game now just cannot be done.
    Jan 28 09:54 PM | 2 Likes Like |Link to Comment