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J. C. Penney Company, Inc. Message Board

  • clawsmeister clawsmeister Mar 8, 2013 10:21 AM Flag

    Unbelievable ignorance about the Martha deal on this board

    I have a put position, and it warms my heart to see so many dumb people are long. Let me educate you a little.

    1. MSO has had a long-term deal with M that GUARANTEES M exclusivity in categories such as cookware and bedding. M and MSO recently renewed that deal.

    2. Martha, looking for more ways to drain dollars from MSO hired Blackstone to shop the company around. Ron Johnson jumped in and put JCP money into MSO to "invigorate" the company. I think it was $16 million. Rather than go into the business, half the money was immediately paid out to shareholders as a dividend. Half of that, about $4 million, ended up in Martha's pocket.

    3. RJ guaranteed MSO about $10 million a year in royalties.

    4. Since the M agreement allows MSO to sell products on line and in "Martha Stewart Stors" (of which there are none) RJ and Martha cooked up the artifice of enclosing the Martha Stewart section with non-load-bearing walls and calling it a "store." Since the employess who operate the "stores" are JCP employeess and all revenue goes to the JCP top line, these are not "Martha Stewart Stores."

    5. A day before M went to court and got an injunction against MSO selling in JCP, RJ the buffoon doubled MSO's guarantee to $20 million a year.

    JCP has alread thrown in the towel (no pun intended) with its decision to call the MSO product "JCP Everyday."

    Martha wins no matter what.

    M has extended its deal with MSO

    MSO gets $20 million a year from JCP even if they can't sell her product.

    Martha has $4 million of JCP shareholder money in her bank account Martha thanks you JCP bagholders for your generosity

    Sentiment: Strong Sell

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