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JCP - JC Penney


farnamstreet

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I think the problem is Ackman has no idea how to run a retail operation. Hell, he tried to sell the investment community on HLF as a quasi-ponzi scheme and immediate had people coming out of the woodwork to discredit his thesis.

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JCP's days are limited. This decline in sales, plus the fallout of Ron Johnson not finishing his store concepts fully (like having incomplete kitchen demo stations because they decided to not finish the plumbing necessary), and the boardroom rage means we won't get a new CEO in 30 days. They might find Carol Bartz or something, maybe she will step in to the hot seat for a round at JCP. Who knows. I think JCP is finished. Ackman lost another retail battle.

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JCP's days are limited. This decline in sales, plus the fallout of Ron Johnson not finishing his store concepts fully (like having incomplete kitchen demo stations because they decided to not finish the plumbing necessary), and the boardroom rage means we won't get a new CEO in 30 days. They might find Carol Bartz or something, maybe she will step in to the hot seat for a round at JCP. Who knows. I think JCP is finished. Ackman lost another retail battle.

 

I'm curious if your opinion would change if they land both Questrom (Chair) and Hicks (CEO)?  Or is that just prolonging the inevitable demise of the company, in your opinion?

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Guest wellmont

Wow, Howard Schultz just slammed Ackman on CNBC, calling him "despicable."

 

http://video.cnbc.com/gallery/?play=1&video=3000189582

 

No position, but this is pretty hypocritical from Schultz. Didn't he pretty much do the same thing at SBUX when he agitated to get the ceo fired only to end up as the ceo.

 

he did this because he is good friends with current jcp ceo, and he knows that he is going to be out of a job soon. it was a personal defense, and really was not for CNBC. but it made for good TV, which is why cnbc decided to do it.

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So I am looking at the chart. It is incredible. Has anyone gotten interested in buying shares not for the long term but the bounce that would happen if any positive news came out at JCP? Or that the board finds a good replacement CEO?

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Questrom becomes CEO/Chairman of Barneys http://www.prnewswire.com/news-releases/barneys-new-york-names-allen-questrom-chairman-and-ceo-74394977.html

 

Perry Capital owns Barneys

http://www.bloomberg.com/news/2012-05-07/barneys-new-york-taken-over-by-perry-capital-in-debt-swap.html

 

August 2013: Both Questrom and Perry are linked to JCP on the same day... with Questrom saying he'll become the Chair if he likes the CEO, and Perry recommending Questrom as Chair and Hicks as CEO.

 

This has got to be more than just a little coincidence.

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Guest wellmont

glenview is also in this. so you have glenview ackman and perry owning about 25%. what does the board own? my bet is that you will see rapid action on getting the dream team in place. and that will be good for a bounce. but it's only a guess. :)

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glenview is also in this. so you have glenview ackman and perry owning about 25%. what does the board own? my bet is that you will see rapid action on getting the dream team in place. and that will be good for a bounce. but it's only a guess. :)

 

Last I checked BOD ownership was < 1%.

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Dream team? I don't think those two can fix or reverse the changes at JCP over the last two years. Ron Johnson was trying to finish a vision that was left mostly incomplete and now this dream team is going to fix a company that has one foot in the old JCP and the other in the new JCP? Doubtful doubtful doubtful!

 

And in their defense they can just say they 'inherited a bad situation!' and walk off with tons of cash and nobody will be the wiser. They will wind up selling this to private equity or getting into some long term finance deal with Ackman & friends. No way can they salvage the company in the next two years with what they have on hand currently.

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They will wind up selling this to private equity or getting into some long term finance deal with Ackman & friends.

 

I know I'm asking for you to speculate but what do you think a PE firm would offer assuming they did so today.

 

And I'm curious if they did some long-term financing via Pershing Square how detrimental that would be to other shareholders outside of Ackman?

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Don't know about the private equity however seeing how Vornado was interested at one point, and Ackman is a notorious real estate/retail guy, there is a chance they would just treat the company as a going concern + a REIT. They would find a way to capture the real estate values over time using a different structure.

 

Today they could still buy the company for little because the whole market cap is at a 10+ year low, and things are really shaky. A white knight type of situation could emerge. Doubtful on that. Ackman would not dare to get too much more involved with financing lest he scare the pants off the investors he is most likely consoling right now about how far JCP has deteriorated.

 

What I like about the SHLD/Fairholme/ESL thing is that Fairholme would get ESL's back and would lend to SHLD. There is a good sense of support on all 3 legs of the stool. Ackman has nobody left to help him, Roth ditched JCP and I doubt anyone on the board would support anything Ackman says. He will most likely have to capitulate his stock as things get worse.

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I still think what happened at JCP was one of the saddest examples of good ideas gone terribly wrong by short term panic and short term owners. Do people really believe the old farts like Ullman and Questrom have any idea what retailing in the 21st century will be like? Those guys jump on TV and spout their opinions in BusinessWeek, people listened as if they had a clue about what Johnson was trying to achieve. Just because they failed to have any vision that doesn't make Johnson a fool. So what happens? They pretty much were the catalyst for ousting Johnson soon after. They re-install Ullman? Blows my mind, man.

 

 

And now the guy who wanted Ullman back says hes gotta go. Note that Ackman's letter only talks about the personal/professional behaviors at the board and executive level. Nowhere does he mention customers, building a retailer that can perform in the future, or online sales figures or what the executive has to do to get JCP up to date. He has no idea what hes doing. And neither does Ullman or Questrom. It will take a forward technology driven CEO to bring these retailers success.

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Don't know about the private equity however seeing how Vornado was interested at one point, and Ackman is a notorious real estate/retail guy, there is a chance they would just treat the company as a going concern + a REIT. They would find a way to capture the real estate values over time using a different structure.

 

And the real estate might be worth $18-$20 per share.

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