There has been much negative public opinion here and I was among the earliest naysayers . I was correct. Ron Johnson is smart but his experience while good is not deep. It is deeper now to be sure. It is much easier to be successful at TGT and AAPL than JCP was on his arrival. I said so and said that the path he was taking was not a good one.
Now he is being criticised for not working. This is not the case. One could argue that he worked too hard and too fast. He effectivelydid not test anything without going all in and this is my complaint and criticism. He has burned far too much shareholder equity. I am fortunate that I understood it would not work very well. I shorted and now I am covered here is why. The market has a short memory and if he can drive double digit sales growth this year the stock can increase in value as much as 20%. The question is really can they do that ?
I am doing some investigation and study on this and I will update you as the data is revealed and analysis is completed. My guess is it can. Sales revenue was destroyed by their spin on an EDLP strategy. Now they are trying to reintroduce intelligent promotion. This would be a method of giving JCP another look. Will the customer like what they see ? That is part of the reasearch we are doing now. I will update later. In the meantime I am a ho;d or if you are not in a watch. I would cover not later than the earnings announcement. Could drop a little more but I think we are close to a bottom here and would be a strong buyer if it hit 15 for a bounce trade.The real question is can they find and satisy a big customer base ? By nature of being a mass merchant without a mass behind them is the crucial problem.
Ron does not need to work harder but smarter. Ackman says he is a genius and the smartest reatailer he has ever met. Well we know Billy's point of view is frequently wrong but if they can stop losing revenue then they can grow it off the artificial low revenue base that Ron's strategy has produced.
My opinion is that he should have been fired. Now that he is still here let's see what he can no do after scorching the earth.