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JCP - JC Penney

farnamstreet

By farnamstreet
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ItsAValueTrap Newbie

ItsAValueTrap

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I'm pretty sure that JCP will have stipulation that as long as these products are sold in JCP stores, they can't sell to Walmart, Target, Macy's etc.

Umm... JCP is moving away from exclusive brands and brands that they own.  They are selling brands that can be found elsewhere.  Joe Fresh for example has its own stores in the US.

 

JCP is trimming the size of its private label brands.  If you read their Facebook page, their private label stuff actually has fans.

 

JCP's strategy could work.  Anything can happen.  But let's be clear about what their strategy is: they are shifting towards selling more of other people's brands.

Selling your own brand(s) is a successful retail and turnaround model.  Drexler turned around Gap by shifting to in-house brands.

Selling (mostly) other people's brands is also a successful retail model, e.g. Walmart.

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BG2008 Newbie

BG2008

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There are a whopping 6 Joe Fresh Stores in the US.  http://www.joefresh.com/en/stores/

 

There is a big difference between selling Nike which can be found anywhere, Walmart, Nordstrom, Target, Online, Amazon, Ebay, etc.  versus carrying Joe Fresh which is only available in 6 stores in the US.  Joe Fresh may not be a private brand of JCP, but given that if you want to buy Joe Fresh products in the US, it's either in these six stores or JCP.  I would say that's pretty exclusive.  It is not a JCP brand, but no one else carries Joe Fresh products. 

 

Let's look at Giggle's and Jonathan Adler.  http://www.giggle.com/Store-Locations-Landing/store-locations,default,pg.html  13 total stores for Giggles

 

http://www.jonathanadler.com/locations.php  24 locations for Jonathan Adler

 

I would say that these exclusive "other people's brands" are what's going to differentiate JCP from the rest of the retailers versus carrying the me too products like "Nike, Reeboks, Disney"

 

I think they'll try to maximize the brand value of inhouse brands like Arizona and Claiborne.  I doubt, they want to expand in that category.  So, agreed, they are looking to carry other people's brands.  But they are looking to differentiate themselves by having brands that can't be found else where.  Bloomingdale does a good job with this. 

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luck Newbie

luck

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before or after the gym, i sometimes walk the mall to warm up or cool down. 

 

here are a few observations on shld and jcp in a large bay area mall that may or may not be in line with your observations:  pretty shocking to see sears  today.  the place looked like a hospital ward - nobody there.  no lines anywhere.  yellow paper fliers for 30% off were taped sometimes to the first article of clothing in the rack.  this means that if someone were to buy this piece of clothing, who knows what would happen to the flier.  the clothing display was a little better than a few weeks ago.  these stores have really suffered from total neglect. we'll see what happens with lampert as ceo.

 

jcp, on the other hand, had traffic flow on par with macy's per square foot.  sephora always seem to be the busiest.  interestingly, no one is ever at the levi's bar.  everything seems to be marked down to the point where it again seems as if gross margins will be massively challenged.  price points at macy's seemed to hold up well.  product display was neat at jcp.  you can definitely tell that ron johnson, though he has made some severe errors in the last six months or so, has instilled an attention to detail that is not present at sears. 

 

all this being said, i have yet to see anything that would cause me to buy the stock right now.

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BG2008 Newbie

BG2008

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Luck, I concur with your observation that there never seems to be people at the Levi's bar.  I don't really know how they pull off $200+ per square foot.  Hopefully, it's because the previous comps were so bad that anything is an improvement over the past.  I've observed the clearance as well, across the board.  Pre-X-Mas, Izod were heavily discounted as well.  But I certainly agree that almost all the JCP stores now looks better than the past.  Better lighting, cleaner look, less inventory, neat display.  My wife commented that it almost look a bit like Nordstrom, the way the products are spaced apart and displayed, not necessarily the actual quality of the product. 

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ShahKhezri Newbie

ShahKhezri

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I see them bringing back sales as a positive.  You can't create word of mouth of the great look/new stores if the only people that know about it are value investors and drive by media.  In fact...as they head to 40...they can have some innovative launches for the new stores. 

 

 

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BG2008 Newbie

BG2008

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http://www.zerohedge.com/news/2013-02-04/going-kill-icahn-trying-bankrupt-ackmans-jc-penney

 

Conspiracy theory that Carl Icahn maybe trying to force JCP into an involuntary bankruptcy in order to stick it to Bill Ackman following their muck throwing cnbc showdown

 

On the other hand, Joe Fresh will debut at 700 JCPs on March 15th.  I would recommend everyone to follow the progress of Joe Fresh, its $/sqft, margins etc.  If it shows any sorts of ability to drive traffic to JCP, I would say that we're getting close to "back up the truck moment"

 

http://www.theeverydayitgirl.com/2013/02/canadian-brand-joe-fresh-is-coming-to.html

 

I would love to know "who paid who how much" for the build out

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drewdalton Newbie

drewdalton

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http://www.zerohedge.com/news/2013-02-04/going-kill-icahn-trying-bankrupt-ackmans-jc-penney

 

Conspiracy theory that Carl Icahn maybe trying to force JCP into an involuntary bankruptcy in order to stick it to Bill Ackman following their muck throwing cnbc showdown

 

 

 

It is interesting that both Carl Icahn and Eddie Lampert reside in the same exclusive compound in Miami Beach.

 

 

Indian Creek Island is an exclusive barrier island off the coast of Miami Beach. Entrance to guard gated Indian Creek Island is granted only to home owners and their guests. The island touts an 18-hole golf course and 32 homes. Its privacy and security — the island is reportedly patrolled by 15 full-time policemen — has made it a popular address for billionaires that include Carl Icahn, Charles Johnson, Norman Braman and Eddie Lampert.  

 

 

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BG2008 Newbie

BG2008

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Got an e-mail from JCP today.  If you buy over $75, you get 1 lb of See's Candies if you're a JCP reward customer.  I wonder if this is a coincidence or if See's Candies will be one of the shops within JCP during the rollout.  So far, you can buy See's in Lord and Taylor in the Northeast tri-state area.  It would certainly be a coup if they do get See's in JCP and it would cost See's very little to roll out the stores. 

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rmitz Newbie

rmitz

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Got an e-mail from JCP today.  If you buy over $75, you get 1 lb of See's Candies if you're a JCP reward customer.  I wonder if this is a coincidence or if See's Candies will be one of the shops within JCP during the rollout.  So far, you can buy See's in Lord and Taylor in the Northeast tri-state area.  It would certainly be a coup if they do get See's in JCP and it would cost See's very little to roll out the stores.

 

I think that would be terrible for the See's brand.  I recall seeing the Godiva chocolates in JCP previously, and honestly they're just not that fresh by the time you buy them in a store like JCP.

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BG2008 Newbie

BG2008

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I think there's a distinct difference between Godiva and what a See's store in JCP would be like.  Godiva has in essence "whored" itself out to all possible retail locations.  It's a bit annoying to be at your local drug store, Century 21 clothing store, off priced retailers, JCP, etc and see boxes of Godiva chocolate with a high initial price and marked off by 35-50%.  I spoke with a rep from See's Candies when I was in Omaha and she mentioned that See's never expanded into the supermarket, drug store, dept stores channel because they do not put preservative in their products and hence the products have a much shorter shelf life.  I would envision that a See's store in JCP would be like a Levi's denim bar.  It would have its own "shop" and be manned by a rep.  They did announce a while back that they are bringing in a Candy store called Sugar Shack. 

 

 

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slkiel Newbie

slkiel

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I doubt there will be an imminent announcement about a See's Shop in JCP, primarily for the  freshness reasons mentioned. However, if you look at their prototype stores, a See's shop would fit in very well with regards to quality and presentation. It would be a value add to See's. If See's ever decided to expand nationally and build out the supply chain, JCP would be an inexpensive and easy way to do that.

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Mephistopheles Newbie

Mephistopheles

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There was an article about See's in either Forbes or Fortune several months ago in which they emphasized the importance of freshness of their chocolates; and as BG2008 pointed out, they don't use preservatives. They have a plan to expand to the eastern U.S., but if I recall correctly, they also are going to build factories in the east in order to eliminate the problem of shipping the chocolate across country and having it deteriorate in quality along the way.

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luck Newbie

luck

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just went to the jcp again.  80% of the top floor (primarily women's) redone.  looks pretty good.  mall traffic increasing and seems to be surpassing macy's in this particular mall.  there were actually small lines at pretty much every teller in jcp.  customer service has turned around 100% - figure johnson must be doing a ton of clandestine operational auditing.  no one badmouthing the company and people seem to have the "service with a smile" (even if they may be forced smiles at this point).  i see jcp taking share from macy's and sears.

 

still assessing jcp:

 

1. would love to hear more people comment on the zero hedge article BG posted before:

 

http://www.zerohedge.com/news/2013-02-04/going-kill-icahn-trying-bankrupt-ackmans-jc-penney

 

2.  also, wondering if any opinions on what the real estate's worth in a severe downturn where malls become ghost towns - thus, they are turned into offices, civic centers, etc.  in this worst case scenario, any guesses on the value per share of the real estate and thus how much downside protection? 

 

 

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