It’s been a rough week at JC Penney. A shareholder who owned 40% of JCP’s stock sold ten million shares off at a loss. Guess what else – that shareholder is also a JCP board member! Not good when you’re dumping your own stock.
Macy’s is suing, because JCP plans to add a new line of Martha Stewart homewares, and Macy’s believes this violates their exclusive contract to sell her line. JCP argues that carrying Martha Stewart’s line is crucial to its turnaround plan.
And yesterday, the company laid off 2200 employees. From the Dallas Morning News:
Former Penney chairman and CEO Allen Questrom said the board needs to act, adding that chief executive Ron Johnson should be replaced.
Questrom, who spent five years in the early 2000s at Penney pulling it out of years of missteps, is frustrated that the board hasn’t forced Johnson to take his ideas to Middle America more slowly and test new merchandise and pricing.
“All these people are worried about Johnson keeping his job. It’s crazy,” Questrom said in a phone interview Wednesday. “What about all these Penney employees?
Penney board chairman Tom Engibous, the retired chairman and CEO of Dallas-based Texas Instruments Inc., didn’t respond to a request for comment. Other board members also declined to comment.
The third week of a trial over a contract dispute with competitor Macy’s over Martha Stewart merchandise continued in a reporter-packed New York courtroom. The trial may be adjourned until April because of scheduling conflicts.
The Plano-based department store chain’s new low points included Tuesday’s news that 10 million shares of stock were sold by a major shareholder who, oh yes, happens to be a board member.
Wednesday, Penney’s stock price fell 53 cents to hit a 52-week low of $14.43 a share.
ll that follows last week’s news that Penney lost almost $1 billion and had a sales decline of a whopping $4 billion, falling to $13 billion in 2012.
On the consumer front, JCP sent out a $5-off-$5 coupon yesterday to shoppers on its email list. And I had a fun time trying to redeem mine in the store, as my cashier didn’t believe it was real. She said “We don’t have coupons anymore…”
What a mess.
jmdetz says
Why don’t companies let their employees know when they change their policies. Grrrr.
naisula says
I feel sad and sorry for them to hear such news. I am surprised that they’ve kept the new CEO this long given the plummeting sales/revenue. I can certainly understand Questrom’s frustration. I don’t know anything about the Martha Stewart contract-thing, but arguing that “carrying Martha Stewart’s line is crucial to the turnaround plan” hardly sounds like a legal standing argument. (How does that work anyway? Would JCP selling Martha Stewart products mean that she’s allowing them to? And then would that mean that Martha Stewart is in violation of a contract?) However, I do take into account that not all the facts are presented in the media (or the media may spin things a certain way). Still, this doesn’t look good for JCP.
Coupon Maven says
Business Insider: JCPenney Is Quietly Firing More Store Employees After A ‘Secret Broadcast’
Store managers watched a “secret broadcast” on Tuesday afternoon, where they were informed that stores must prepare to “work harder with less” in 2013.
A Service Leader is JCPenney lingo for a sales manager, explained an employee who was informed yesterday that he’s being laid off. He described his job as “basically a second-level store manager” who had overseen multiple departments in the store.
“It was right after a secret broadcast that we were all called one by one to be notified about the dismissal. We were told thank you for your hard work, your last day will be April 5,” said the manager. “And there’s nothing we could offer you.”