How long do you give JCP? | TigerDroppings.com

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nolanola
Member since Nov 2010
4611 posts

How long do you give JCP?



I say 24 months or so until they're done. Maybe sooner if the "new" CEO doesn't right the ship very quickly.

quote:

COO, chief talent officer exit J.C. Penney
Chief Operating Officer Michael Kramer and Chief Talent Officer Dan Walker have left J.C. Penney, the company said Thursday. The two were hired under previous CEO Ron Johnson







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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: How long do you give JCP?


They will last for a long time. It's a buying opportunity.

I do not own any, however.






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kaaj24
LSU Fan
Dallazz
Member since Jan 2010
197 posts

re: How long do you give JCP?


I'd give them 5 years.





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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?


If they don't the increased line of credit they are asking for pretty soon, JCP will be out of cash much sooner than 2 years.

I read a book about the situation at JCP this week. It starts with Chapter 11.






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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: How long do you give JCP?


quote:

If they don't the increased line of credit they are asking for pretty soon,


I believe the did that a few days ago, right? $850 million I think.






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?


quote:

I believe the did that a few days ago, right? $850 million I think.

I just searched and couldn't find any news saying JCP has had their LOC approved. There was one story dated yesterday morning which said a banking syndicate approved a loan secured by JCP's real estate but JCP has not accepted it yet. (That tells me the loan's terms were unfavorable to JCP so far.)

The article also said JCP's LOC request to Wells Fargo for a $500 million LOC was still pending.

The same article had this paragraph in it: "Standard & Poor's has issued a warning on J.C. Penney, saying that adding more secured debt to its balance sheet could lead to a downgrade of the company's CCC+ credit rating. The rating already indicates that the company's bonds are trading at high-risk, or "junk" levels."







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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8758 posts

re: How long do you give JCP?


They drew $850M of it's $1B credit facility, I believe (could be $1.5B, I don't remember).

I am monitoring the stock. It is a dumpster fire right now. I'm not going to jump in unless I've concluded they have stabilized.

Ron Johnson really raped the company up the a-hole.






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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8758 posts

re: How long do you give JCP?


Furthermore, I am somewhat surprised that they are not in violation of any of their financial covenants.

The banks must be sweating out the draw because even though they are secured by the inventory and credit card receivables, the company is performing poorly but they can't stop the draw because they are in compliance with all of the terms of the credit agreement.






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?


quote:

They drew $850M of it's $1B credit facility,
That was from an existing LOC, right?

Everything I've read about them is their existing facility won't be enough to get them through the fall/back to school buying season.

That's why I said they need to secure an additional credit facility.






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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8758 posts

re: How long do you give JCP?


Russian, you are correct. Existing facility.

I have read that they were kicking the tires on some other debt. It is going to be very expensive for them. They are going to have to swallow their medicine and take some tough terms.






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?


quote:

It is going to be very expensive for them. They are going to have to swallow their medicine and take some tough terms.
Agreed.

I have not been in a JC Penny's store in years. I don't even think about them when I'm considering buying something. Not that my business matters to their survival but it seems too many other shoppers are like me.

I don't think they will survive without a Chap 11 reorganization (which would wipe out the existing stockholders, pretty much) and they may not survive even if they do that.






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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8758 posts

re: How long do you give JCP?


Interesting...it's a very competitive business landscape and the fall is typically fast and furious in this industry.

I think Macy's went BK about 7-10 years ago.






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wegotdatwood
Arkansas Fan
Member since Aug 2009
17094 posts

re: How long do you give JCP?


quote:

Ron Johnson really raped the company up the a-hole.



Why did they get rid of the guy before him? Wasn't it doing well?






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kywildcatfanone
Kentucky Fan
Wildcat Country!
Member since Oct 2012
19930 posts

re: How long do you give JCP?


I kind of thought Sears/Kmart would be gone by now, but there is brand value in JCP (even though removing their name from the logo was stupid), and it's a large company in a competitive environment. It will survive, but likely shrink some more.
Too many clothing retailers for them to make any significant come back.






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Tigah in the ATL
LSU Fan
Atlanta
Member since Feb 2005
25237 posts

re: How long do you give JCP?


Less than 24 months.

The entire organization is old heads in complete denial. They keep planning major logistics initiatives and seem genuinely surprised when they can't get the money for them. (They are a client)

It was clear for me it's over when they brought back the guy who had already driven them into the ditch.






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fishfighter
LSU Fan
Baton Rouge
Member since Apr 2008
19511 posts

re: How long do you give JCP?


I saw this coming a good 4-5 years ago. Best case would be that they down size fast and keep there credit line which is the only thing they have going for them. With interest rates low and banks looking for a return on investments, there will be a few that will take a chance, but I'm sure the rates/plan will wipe out JCP with in 18-24 months.
More then 50% of store locations are now in bad parts of towns.






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BigBoyTiger
LSU Fan
Chicago
Member since Aug 2005
8758 posts

re: How long do you give JCP?


quote:

Why did they get rid of the guy before him? Wasn't it doing well?


I'm not well versed on the old guy now the new CEO...but I think it was because the stores were losing market share and needed a new strategy...






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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?


quote:

I think it was because the stores were losing market share and needed a new strategy...

That is my perception also.






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Zach
LSU Fan
Member since May 2005
65209 posts

re: How long do you give JCP?


quote:

I read a book about the situation at JCP this week. It starts with Chapter 11.

Will they do a 'going out of bizness sale?'

I love those things.







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LSURussian
LSU Fan
Baton Rouge
Member since Feb 2005
83688 posts

re: How long do you give JCP?








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