Ron Johnson

For more than a year, FOTM has been chronicling the precipitous decline of J. C. Penney (JCP) which began when CEO Ron Johnson decided to “improve” the family store by pandering to homosexuals — hiring lesbian Ellen Degeneris as the company’s spokeswoman, and featuring lesbians and gay men as, respectively, moms and dads in its Mother’s Day and Father’s Day ads.


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Earth to Ron Johnson: Gay men don’t buy their clothes from JC Penney!


Johnson’s move wasn’t smart on the grounds of simple market calculation. The plain truth is that homosexuals comprise no more than 2% of the U.S. population, according to a studby the Williams Institute, a gay and lesbian think tank at UCLA School of Law, and corroborated by none other than the U.S. Centers for Disease Control and Prevention (CDC).

Alas, more than 5 months after JCP finally gave Johnson the boot, JCP’s fortunes continue to sink. The question must now be asked:

Will there be a JCPenney a year from now?

Here are the bad signs:

1. JCP is losing even more money than a year ago

On Aug. 20, 2013, USA Today reports that JCP reported a net loss of $586 million for its second quarter — its 9th consecutive drop in quarterly revenue. The $586 million loss compares with a $147 million net loss a year ago. Same-store sales were down about 12% from the second quarter of 2012.

2. Investors are jumping out of the sinking ship

CNN reports that in late August, investor and hedge fund manager Bill Ackman who began buying JCP in October 2010 when shares were around $25 a piece, cut his losses and sold his entire stake — all 39 million shares in JCP to Citigroup. The latter then offered the shares at $12.90 each, which means Ackman took a loss of $500 million.

3. Goldman Sachs begins to talk about JCP going bankrupt

ZeroHedge reports on Sept. 24, 2013 that Goldman Sachs just wrote a report in which it laid out, in a lucid and compelling manner, why JCP is doomed although the report tried to soften the blow by saying “we believe handicapping a bankruptcy filing for JCP is premature.”

4. JCP stocks plunged to single-digits

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The day after the Goldman Sachs report, on Sept. 25, 2013, as reported byZeroHedge, JCP stocks fell 16% to single-digits.

JCP now trades sub-$10

Even before the cratering of JCP stocks, in early August, analyst Jon Najarian already had said J.C. Penney can’t be saved.

As reported by Jeff Macke for Yahoo, Aug. 1, 2013,’s Jon Najarian thinks a year from now J.C. Penney will be little more than a distant memory or half the size it is today. Macke paints a stark picture:

Retail is difficult to execute but not complicated to analyze. If you turn down all the noise and walk through most of the 1,000+ J.C. Penney stores around the country, you’ll find a lot of chaos and not many customers. The most loyal Penney’s shoppers have been alienated, and the younger customers the chain so desperately courted have yet to appear.

Current CEO Mike Ullman only took back the corner office in April but there’s little evidence that he’s been able to right the ship. […] 

No retailers can survive a 30% drop in sales over the course of 2 years. Analysts are hopeful the rate of the decline in sales will stabilize by the end of the year but there’s little to suggest that new customers are coming in or the old shoppers have learned to trust JC Penney again. Liquidity and downgrades aside, J.C. Penney’s biggest problem is that customers simply don’t like what it’s become.

See FOTM’s past posts on JCPenney:


Dr. Eowyn is the Editor of Fellowship of the Minds.