Poor JCP. In the continuing saga of JC Penney trying to regain market share, it is now admitting its radical plans for reinventing itself may not work. This week, JCP stated in its annual report that “there is no assurance” its turnaround will succeed.
From the Los Angeles Times:
Beleaguered retailer J.C. Penney, struggling to boost slumping sales and tanking traffic through an intense revamp, said in its annual report that the turnaround “may take longer than expected” and that the results “may be materially less than planned.”
The document, filed with the Securities and Exchange Commission on Wednesday, shows a company careful not to be too confident in its rebirth strategy.
“There is no assurance that we will be able to successfully implement our strategic initiatives,” J.C. Penney wrote in the report.
The merchandise and pricing changes could confuse customers and distract management, possibly causing a pileup of excess inventory, according to the report. If foot traffic continues to slide, the company said it may need to increase markdowns or change its marketing strategy again.
I realize JCP brought Ron Johnson in as a corporate “rock star,” who, at a salary of $50 million per year, was going to radically reinvent the company. But at what point does someone step in and say, hey, this just doesn’t make sense anymore? The LA Times article above states that 19,000 JCP employees have lost their jobs over the past year. Meanwhile, Business Insider has written that JC Penney’s cost to fly Ron Johnson on a private jet to and from work each week, commuting from San Jose to Dallas, is an estimated $41,817 – more than what one of their associates makes each year.
The mind reels.
cg1 says
“JC Penney’s cost to fly Ron Johnson on a private jet to and from work each week, commuting from San Jose to Dallas, is an estimated $41,817 ”
I’m thinking this will catch on at the next shareholder’s meeting similar to the way a few years back when all the auto execs went to Congress for bailout money and ran into a big gotcha as to why they were asking for a bailout when they took private jets to attend.
I’m surprised he’s still taking a salary and is not on a $1 salary with everything else based on company performance. This is really like something from the past.
moreforless says
He only makes 2 million a year, but they did give him 50 million in JC Penney stock for taking the job.