# Jcp



## Uranium101 (Nov 18, 2011)

Just reported on Feb 27th, and stock plummet.
You guys believe in the turnaround story?


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## Toronto.gal (Jan 8, 2010)

This company is now trading at same levels as in 2008 & it could get worse! 

In addition to the massive Q4 loss, they also lost $203m in Q3. The company reported a 25% decline in sales, including a decrease in internet sales of -33% in its last quarter, so this company is really in trouble.

The CEO's turnaround plan, a so called 'simplified business model' that was introduced more than a year ago, did not work so well, so time will tell if his next approach will work or not. 

I'm waiting to see if the courts will give them a legal victory over the rights to sell Martha Stewart's products. 

It's never easy to get back lost customers in such high numbers.

A comeback is not impossible, but it will be tricky indeed, AND it will take time, if they have that!

http://www.bloomberg.com/news/2013-...imperils-makeover-plan-corporate-finance.html


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## Uranium101 (Nov 18, 2011)

Thanks for the input Toronto.Gal, here are my responses to your concerns.



Toronto.gal said:


> This company is now trading at same levels as in 2008 & it could get worse!


This company failed big time under the old management. If the old management is still in place, it would be going down to zero.



Toronto.gal said:


> In addition to the massive Q4 loss, they also lost $203m in Q3. The company reported a 25% decline in sales, including a decrease in internet sales of -33% in its last quarter, so this company is really in trouble.


They are getting rid of their old inventory which were purchased under the old management. When you get rid of these inventory, you got to sell them at low low low prices, hence the margin is squeezed to non existence. As for the Internet sales: well, the choices they get from online is limited in comparison to what they offer in stores. When they get these things up and running, they will improve their offerings on their website.



Toronto.gal said:


> The CEO's turnaround plan, a so called 'simplified business model' that was introduced more than a year ago, did not work so well, so time will tell if his next approach will work or not.


The pricing strategy failed big time, and the CEO acknowledged that, and he took full responsibility for it. Not many CEO are willing to take full responsibility for anything these days. It appears that most shoppers would prefer to have an artificially inflated price but then offered a discount rather than getting that price straight out. ie: $200 item with 50% discount vs $100 straight.



Toronto.gal said:


> I'm waiting to see if the courts will give them a legal victory over the rights to sell Martha Stewart's products.


That I can not tell; I believe JCP is at fault here. However, if Martha Stewart's wares was hired as a contractor, there is no law preventing them from entering into a contract with another company doing the same services (not doing the same things). Each company has their own unique problems, and contractors were hired for that purpose. The tough part here for JCP is that Macy and JCP are in the same business.

Martha StewartIt's never easy to get back lost customers in such high numbers.


A comeback is not impossible, but it will be tricky indeed, AND it will take time, if they have that!

http://www.bloomberg.com/news/2013-...imperils-makeover-plan-corporate-finance.html[/QUOTE]

It will take 3-5 years at most. If longer than that, I am out. I will review this company thoroughly in year 2 to see how far they have gone.


Disclosure: I have a small position in this company averaged $18/share. Looking to add more when it plummet some more.


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## Toronto.gal (Jan 8, 2010)

So you went for it!

In that case, I wish you luck; your username suggests that you're a patient person. :encouragement:

The JCP/Macy court battle should be over soon; if it goes in the latter's favour, JCP might hit the low teens, and then I might get tempted.


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## PMREdmonton (Apr 6, 2009)

I`d be wary of any general dept. store retailer right now who isn`t serving high end customers. Right now the internet side of retail is killing them at every turn with the expense of running a huge bricks and mortar operation which can then act as a showroom for the internet operators.

So one by one they continue to fall - Sears, JCP, Borders, Barnes & Noble, Radioshack, Best Buy, Circuit City.....

General retail is just a cut-throat business right now. I`d avoid the whole sector until things stabilize. Many of the existing companies may go broke as the shift to online retailing leaves them with high fixed costs, too much space and a declining sales base.

The only retailers who I think are reasonably safe to invest in right now are Walmart, Costco, Nordstroms and maybe Target. Most of the dollar stores seem overvalued to me right now. I`m not convinced that Macy`s isn`t going to be next with the dwindling middle class financial strength.


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## Uranium101 (Nov 18, 2011)

Yeah, get them while they are still cold.
My cold bets on CCO and JCP are just extraordinary.


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