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JCPenney is allegedly investigating whether its construction teams are remodeling stores without proper building permits.
"'Keep building, don’t worry about the permits,' one senior Penney construction exec told underlings in a meeting this spring, according to a source close to the retailer," Covert reported. "The message was, ‘This project must get done, and if you fail, JCPenney fails,'" the source said.
JCPenney's vice president of real estate and construction left the company last week amid the investigation, according to Covert.
The shop-in-shops were a key part of failed CEO Ron Johnson's strategy to make JCPenney feel more modern.
The in-store boutiques were modeled after higher-end department stores like Bloomingdale's and showcased certain designers.
While the retail industry generally agreed that the shop-in-shops would improve the appearance of stores, the strategy burned through a ton of cash.
Even though Johnson left the company two weeks ago, many stores were still under construction. Now that the job is started, crews must finish it.
Sources told Covert that Johnson was belligerent about stores following his plan, and wouldn't take no for an answer.
"He was very adamant that there were no excuses,” one source told Covert. “He’d say, ‘Don’t come to me and say we can’t do this old store because it’s full of asbestos.’ He wanted to hear, ‘This is what’s being done to fix it.’”
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