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J. C. Penney Company, Inc. Message Board

  • RETAILexecutive RETAILexecutive Oct 23, 2011 2:04 PM Flag

    JCP Turnaround

    I specialize in turnarounds. I have successfully shorted JCP in the past and then got clipped on new position. I am currently reviewing this stock as a potential long. I must say it looks cheap and that is what is bothering me but I will do a complete review before entering a new position. I believe JCP lost its' way many years ago and really has not much of a strong category mind share awareness with the consumer base. If you ask yourself what category does JCP have a strong first mention from consumers I can not find it.
    It does sometimes make the top 7 in domestics. I am not sure if that is enough . The balance sheet while sroded is good enough with current cash flow to actually achieve a turnaround. Some new executive horsepower has been added but it remains to be seen if it will be successful in managing change.I am not sure yet that I ubderstand what change is going to be undertaken. There are some posts heree that are hoping for $40. I would too if I was in their position.

    Names that come up frequently in brand tests against JCP :

    Nord, KSS, TGT, M,there are many others that are not full line stores as well. I believe the customer is a bit older at the core than it should be to build a fashion apparel image but there are some possibilities in developing a unique value position but it will take some time and the current buying team will need serious review and retraining along with a talent injection. marketing appears to be substandard and an opportunity to improve when they define their strategy and message. Advertising is a blur of the non-descript.This too can be fixed but the real opportunity is building solid core ssortments that have a strategic advantage and some major differentiation from other mass and department store retailers. A look to speciality stores for some education before just running out to market and saying me too is advised here.I will be visiting a number of stores in the next 6 weeks to establish a benchmark review strategy.There is opportunity and some new players but the job is enormous selling in new ideas to "old dogs". The economy I believe is neutral in any turnaround strategy. I do not look for much help and not much harm either. KSS is the new JCP and has really run their old strategy far more successfully than the new JCP strategy has been implemented. More later.I will buy a small position on a pull back just to get some skin in the game.

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    • JCP has been carried along with this market and definitely gotten ahead of itself. It is a good turnaround story. Ron Johnson might be the best retail guy in the country and his new #2 guy from Target is very strong also. If anyone can turn this moribund franchise around, they can. But, it is a multi-year play and certainly NOT a trade at these levels. BUY any significant pullback and just put it away for a few years. It won't be a 10 bagger but a good solid single or double.

 
JCP
9.22+0.03(+0.33%)Jul 28 4:02 PMEDT

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