Archive

Archive for the ‘Business’ Category

Target (TGT) Stock Price Breaking Down?

April 10, 2012 Leave a comment

Looks like the Target (TGT) stock price is breaking down. Here is the TGT 1-year stock price chart.

Target TGT 1-year stock price chart

Target TGT stock has been overbought recently

It appears that the TGT stock price is moving from a overbought status as demonstrated by the channel in the bottom chart. Whether this will continue is unknown, but it seems likely.

Now, let’s look at the TGT 5-year stock price chart.

Target TGT 5-year stock price chart

Target TGT stock price may not reach much higher

It appears that around the $60 level, TGT has difficulty breaking through. Also, for the past several years, TGT appears overbought. At these price levels, I don’t think I would be looking to purchase TGT as it does not appear to have much room to rise, and may – in fact – fall more in price.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor. 

JCPenney (JCP) is a Bad AAPL

April 9, 2012 4 comments

How much absolute crap has the public been fed about how JCPenney (JCP) was going to miraculously transform themselves into the AAPL of retailing? JCP was going to become our favorite place to shop, or some, B.S. But, it is looking more and more like all of the buy-side stock analysts that urged suckers, er investors, to purchase JCP stock and ride it all the way up to $40 or $42 per share were full of baloney. Seems to me that you can’t have junk, or crap, if you don’t have JCP.

To see how ludicrous predicting a plus $40 JCP stock price, take a look at the JCP 5-year stock price chart.

JCPenney JCP 5-year stock price chart

Apparently, stock analysts calling for $40 plus JCP stock price never saw this chart

After all, with the huge economic boom brought about by quantitative easing Helicopter Ben Bernanke and the boys at the Federal Reserve, why wouldn’t JCP stock reach into the heavens?

Instead, Icarus-like, JCP stock price got a little too close to the sun and is now falling back to earth.

JCPenney JCP 3-month stock price chart

JCP: But the stock analyst said it would go to over $40 per share...

I hate being lied to and I find it annoying when people can’t see the obvious. What in the world would make anyone believe that JCP and AAPL should be spoken in the same breath, much less that JCP will somehow transform its snoozapalooza anchor mall locations into Apple Stores?

Who came up with the crank concept of creating “a store within a store”? I prefer to call the strategy concentric circles of hell, but that’s me.

If I were in charge of JCPenney I would have closed down the unprofitable and marginal stores and remodeled every one of the crap mall locations like I have in my town. Instead of the traditional “rat searches for a piece of cheese strategy” whereby JCPenney makes its poor customers wander around aimlessly hoping to encounter what they are looking for, I would make it easy to shop there. The store would be open with signs indicating each department – not “store within a store”.

Employees would have a distinctive uniform in order to separate them from customers. Employees would not be allowed to hide from customers while they attempted to look busy folding clothes. In fact, employees would be required – in a not-too-aggressive manner – to make contact within second with each customer who came into their department. There would be something akin to a shopping assistant who would be certain to ask you if you found what you were looking for today, and if you answered “no” would offer to order the item and have it either shipped to the store or to your home. Cash registers would be clearly labeled and colored distinctively so they stood out from anywhere in the store.

When customer checked out they would again be asked if they found the items they were looking for. If not, there would be a kiosk-type display where an employee would find the item and offer to order it or – if the item was in stock – would go pick it up and bring it back to you.

Old line retailers like JCPenney, big box retailers like Lowe’s lose incalculable sums of money because they treat customer more like a nuisance than like the lifeblood of their business.

JCPenney’s silly junk marketing of everyday low prices, and crap ideas of becoming Apple are beyond wishful thinking. There is almost no hope that JCPenney will ever, ever, ever come close to achieving those ridiculous ideas. JCPenney could, however, offer a pleasant shopping experience with excellent customer service and grow its incremental sales. That is a tried and true method that, combined with taking advantage of the Internet, could prevent JCPenney from eventually meeting with the fate that awaits Sears and K-Mart. However, I doubt the CEO and many Senior Vice-Presidents will take the time to look at what really might work, and will instead continue to pump AAPL pie-in-the-sky ideas while watching JCP stock slide.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor. 

Did Going “Soft” Kill Sears (SHLD)?

April 9, 2012 2 comments

First, a look at the five-year chart for SHLD.

Sears SHLD 5-year stock price chart

Sears SHLD and its 5-year dis-engagement

The slide in Sears has been rather impressive. It seems like only a few short years ago they were being lauded for their “brilliant” strategy of promoting soft lines, like clothing. Then they expanded even more, including grocery items and more. I suppose the idea was to capture the entire family business with the stereotypical male going for the hardware items such as Craftsman tools, the the stereotypical female purchasing clothes, groceries, appliances, etc.

In reaching for an ever-larger percentage of the family shopping basket, it appears Sears has lost more and more of it.

Sears now is selling its premium brand Craftsman tools, riding lawn mowers, etc. at steep discounts.

This has been going on since at least before Christmas. Our local Sears sits in a huge new building and includes an automotive center. Almost any day you can go there a see very few people inside, and even fewer buying very much. The soft good are OK, but nothing to get excited about. Tools have been heavily discounted for the past several months. The electronics section is a real yawner, poorly organized, over-priced, with few items to get excited about. It is not surprising at all then, with this as background, what the 1-year SHLD stock price chart looks like.

Sears SHLD 1-year stock price chart

Did going "soft" kill Sears?

After a relatively brief period of overbought insanity, SHLD bounced off the declining white price resistance line and is now heading back to earth.

It appears that SHLD may over-correct into oversold territory, knocking the stock price down further.

In light of the steep discounts on its premium Craftsman line, it appears Sears is in trouble. If Sears does ultimately fail, or becomes a pale shadow of its former self, it will likely be because Sears tried to be too many things to too many people. Going “soft” may kill Sears.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor. 

Amazon-ed by Subscribe and Save Pricing Games

Image representing Amazon as depicted in Crunc...

Image via CrunchBase

I like Amazon. I have been a customer for years. Like many, I shop online for the convenience, pricing and to purchase items that are no longer available, or are have undergone significant price increases.

So, for me, Amazon’s Subscribe & Save feature has been great. But lately I have noticed a trend. Amazon is constantly changing their prices for the items that I subscribe to. Sometimes the price moves down, but often it moves up. Amazon has also developed a nasty habit of no longer offering the items I subscribe to, and the alternative choices, more often than not, come in smaller quantities and at a higher per unit price.

Amazon’s tactic appears to be, reel you in with a low-ball price and then, when you’re not looking, raise the price. Recently they cancelled my subscriptions to Charmin Ultra Mega Roll and Bounty Huge Roll. This actually worked out for the better, as upon checking the price at Sam’s Club, I learned I could buy both items for less per square foot there than through Amazon.

I understand that Amazon already has a very low profit margin and that they are delivering these items to my door. However, Amazon surely must realize that they are in the same position as Wal-Mart. I shop at both businesses not because I am enamored of them, but because they offer a low price. Once they no longer offer the lowest price – and failing to offer anything else of real value – I am gone.

The thing is, I’m tiring of getting Amazon-ed. Just like Wal-Mart went from offering the lowest prices, and displaying competitors ads at the checkout, to a more everyday low prices (translation: catch us screwing you on price if you can) model, Amazon is attempting to change their strategy. However, Amazon isn’t offering me anything else of substantial value other than price. They have painted themselves into a corner. They won me over with low prices and they have nothing else to woo me with.

Amazon, if you’re listening (and why would you be?) keep changing your Subscribe & Save prices and I’m going to game your system. I’ll cancel one subscription and replace it each and every time with the lower priced alternative. I’ll keep comparing you to the competition and cancel each subscription that is higher priced. I have already begun shifting some of my video rental business to Google Play. Then, when you Amazon me one too many times, I’ll cancel all of my subscriptions and avoid buying from you whenever possible. Keep playing the game. You have a gazillion items to choose from, but I have something you want – money. Amazon, it’s up to you – I’m getting tired of being Amazon-ed.

Update: 4-7-12

Made my first purchase of a book from Google Play. Purchased Russell A. Barkley’s Taking Charge of Adult ADHD.

To an extent I hate to hand Google even more information about myself in case they end up being “evil”. At the same time, I’m not sitting still for Amazon’s Subscribe & Save pricing games. So I guess we’ll play a version of Hunger Games – me denying my few crumbs to the giant.

It might not make a big difference on an individual level, but if more people do the same, Amazon might catch a clue.

 

JCPenney (JCP): Analyze This

March 30, 2012 2 comments
Would you buy a stock from this guy?

In light of the incredible falling price of JCPenney (JCP) stock, you might want to slap one of the stock “analysts” who set a target price for JCP of over $40.00. Then, slap the analyst again, for giving the stock a buy or hold rating. The fact is  many of these analysts are merely working the makeup counter for PigsRUs.

Buy side analysts often have some sort of vested interest in the stock. A buy side analyst working for a mutual fund or investment management company typically owns the stock he or she is covering.

(Read more: http://www.investopedia.com/articles/stocks/10/stock-analysts.asp#ixzz1qaIAwY6p)

To me, it seems a bit like a potential sucker (er, customer) walking into a used car dealer and asking the liar (er, car salesman) anything about a car. Of course every car was driven by a little old lady, who only went to the grocery store once a week to buy Alpo for her and her dog. She polished the car every day with a cloth diaper and had all the recommended maintenance done on schedule. Or was the car owned by a hot-rodding teenager who liked to burn rubber and had no idea that you had to change the oil?

Anyhow, it doesn’t take the razor-sharp skills of a buy side analyst to look at JCP. Just go to your local JCPenney. Is there anything exciting about the experience without a giant discount off the price of the merchandise? Do you wake up Saturday morning and the first thought that goes through your mind is, “Yippee, I’m going to JCPenney”?.

Does anyone really think you can re-imagine JCPenney any more than you can visualize world peace?

You might think iPhones have little to do with selling housewares. But to hear Johnson tell it, it’s all about the mind-set and how a company approaches its customers. In a conference call, there were plenty of distinctively Apple-esque phrases used — “re-imagine,” “think differently” and “work creatively” to name a few.

The idea that Apple and JCPenney have anything to do with each other is absurd. Short of a going out of business sale, what is JCP going to do that is going to get a crowd of people wrapped around the block before the doors open. “Man, I can’t wait. JCP just got the latest shipment of Dockers!”

Steven P Dennis offers up some of the best analysis and criticism of JCPenney’s new strategy.

In Part 1 Dennis takes apart the pricing strategy:

First of all, unlike Nordstrom, every promotional retailer like Penney’s (and Sears and Macy’s and Bed, Bath & Beyond, etc.) has taught their customers–over many, many years–that their “regular” price is a sucker price. Reversing this perception will not happen quickly, no matter how creative your new ad campaign is and no matter how much money you throw at it in the first few months.

In Part 2 Dennis takes apart the re-invention of JCPenney:

While I have no doubt that Penney’s can benefit from many of the leadership lessons and certain tactical aspects of Apple’s retail strategy, Penney’s ain’t Apple. It’s a lot easier to build retail stores around products that are in high demand, have limited distribution and “fixed” high margins. Apple is a single brand specialty store with a clear tribe of loyalists, not a multi-brand, multi-category store serving an incredibly diverse set of customers.  Apple is vertically integrated and the stores benefit directly from total brand advertising–and a ton of buzz. All of Apple’s stores are in “A” real estate locations and have a tight prototype and are not unit intensive. The list goes on and on.

In Part 3 Dennis looks at the slick marketing versus the sad reality of JCPenney stores:

In the short-term, the work of marketing is to get the target customers’ butts in the store (or drive them to the website). I suspect the new campaign IS elevating interest in JCP and starting to drive incremental traffic. Yet while Penney’s has improved their presentation markedly, the stark reality is that both the product assortments and overall experience are still pretty much the same–i.e. unremarkable in most instances. And unlike Apple and Target, Penney’s store fleet is a grab bag of some very good locations with a whole bunch of mediocre and lousy ones.

We all know that when the invitation is better than the party, we aren’t very likely to get fooled the next time around.

It’s not likely that once customers get pushed to the local JCPenney by the latest Ellen Degeneres ad, that they will be dancing in the aisles.

http://cdnapi.kaltura.com/index.php/kwidget/wid/1_43rfgjve/uiconf_id/6501231

The latest JCP charts aren’t anything to get excited about either.

JCP Chart 3-29-12

Hey JCP, $40 is the other way!

JCP stock price still is below the sell trigger line and also within a downward-trending price channel. I don’t care what Herb Tarlek the buy side analyst says, the price of JCP will go down until it manages to break out of the current chart pattern.

JCP stock price still falling

JCP: No dancing in the aisles here

So, despite what Herb Tarlek buy side analyst might say, and despite the star power of Ellen Degeneres, the JCP stock price is going down. How long the downward trend continues remains to be seen, but the charts are clear. You don’t need to be a stock analyst or an expert on retailing to see that it won’t be easy for JCP to hit the $40.00 target analysts are expecting. Just go down to your local JCPenney and compare the vibe to an Apple Store or even the local Target. Trust your gut. Use your common sense. That’s something Herb the buy side analyst will likely never do.

Disclaimer: The above is for informational purposes only. This should not be considered investment advice. Any investment decisions are your own and should be made after conducting your own independent research and / or in consultation with a professional investment advisor. 

JCPenney (JCP) Look out for Falling Stock Price

March 18, 2012 6 comments
Everyday Low Prices: Where have I heard that one before?

JCPenney, masters of the original, are promoting low, everyday prices.

Despite trying to be the most interesting store in the world, it appears that JCPenney’s (JCP) stock price is about to fall like the prices inside of a Wal-Mart.

JCPenney: Look out for Falling Stock Prices

JCPenney's stock price has fallen through the bottom of its Andrew's Pitchfork and are sitting right on top of the sell trigger.

Looking at the JCP chart above, its price has fallen through the bottom of the Andrew’s Pitchfork and is now sitting right on the sell trigger line. If the price falls much below Friday’s close of $36.24, then the JCP stock price is going to fall faster than the price of ice melt in Wal-Mart after a mild Missouri winter.

Disclaimer: I’m not a stock broker, so unlike a certain broker of days gone by, you don’t have to listen to me. Do your own research. Do your own thinking. Don’t be a lemming. The above is provided as information and entertainment only. Capiche?!?

Update 3-19-12

J.C. Penney Company Stock Chart

J.C. Penney Company Stock Chart by YCharts

JCP has managed to bounce off the sell trigger line for now. That being said, it still isn’t a pretty picture as it had already fallen through the bottom of the Andrew’s Pitchfork above and still sits precariously close to the sell trigger line. My gut tells me that JCP will soon break that line and continue downward. But hey, maybe it’s hunger pangs since I haven’t had lunch yet.

Update #2: 3-19-12

Looks like JCP is slipping a bit.

J.C. Penney Company Stock Chart

J.C. Penney Company Stock Chart by YCharts

It’s not easy trying to be like Apple I suppose, what with all those shiny new iPads that CNBC has been slobbering over all day (what a bunch of shills). Of course that won’t keep me from buying my wife one.

But, just because JCP has a former Apple executive in charge doesn’t mean they can convert the JCPenney at our local mall into an Apple Store. I don’t think they can. I rarely go to the old line retailers like JCPenney or Sears. There is just something very old-fashioned and unappealing about them to me. I’ll let the over 50 crowd have them. I much prefer a hit and run trip to Wal-Mart, Target, or better yet, shopping online at Amazon than going down to boring old JCPenney. It looks like I am not alone in that sentiment.

The Most Interesting Store in the World

March 17, 2012 3 comments

He can speak French in Russian

There has been lots of hype lately about how a former Apple / Target executive along with a bunch of other former Target executives are going to transform JCPenney into the Apple of retailing. Unless these jokers get the exclusive rights to sell iPhones and iPads, it ain’t gonna happen. Why? Because size. Because location. Because inertia. Because, because, because.

When I was young I used to hate the people who always rained on my parade. They took my dreams and ever so gently pushed them under the bus. Ah the irony! I’m no expert in retail, although I have spent the majority of my life working in either retail or sales. My parents ran a small chain of retail stores where I learned about retail, merchandising, marketing, markup, etc. You don’t need a fancy title, a gold-plated resume, or a stellar career with some mega-corporation to see that JCPenney isn’t going to make the transition from that boring store mom used to drag me to into the most interesting store in the world.

I don’t care if that guy from the Dos Equis commercials becomes the Senior Vice-President for Marketing and shows up with a mountain lion, a gorgeous blond on one arm and a brunette on the other and an eighteen wheeler loaded with cerveza. I’m not shopping at JCPenney, unless I need a new pair of underwear, or something similarly mundane.

When corporations start bragging about how they are going to become the next Apple or Target it reminds me of a simple fact – the world already has an Apple and a Target, and they are pretty damn good at it already. Perhaps if JCPenney had been a better Penneys they wouldn’t have to blow so much marketing smoke up our derierres.

To an extent, JCPenney is caught at the cross section of several unfavorable trends. Shopping malls are dying. Personally, I hate the mall. I would rather clean the vinyl siding of my house, mow the lawn, vacuum the carpet, wash the dishes, watch an episode of The Bachelor, go to the ballet, and then have a long conversation with my wife where she tells me about how her day went in mind-numbing detail in lieu of going to the mall. While you’re at it, just shoot me and save me the misery of the mall. The economy continues to be lousy, despite the MSM shoveling truckloads of industrial strength cow manure regarding how we have finally turned the corner. The Baby Boomers have bankrupted the country, are spending their children’s inheritance, and sucking every last bit of government gravy down before they shake this mortal coil. We’re screwed, and so is JCPenney.

JCPenney is like a giant elephant. You can dress it in a tutu and buy it some extra large ballet slippers, but you won’t see it performing a graceful piroet in the Bolshoi Ballet any time soon. Which is to say, JCPenney is huge. It has pie in the sky plans to completely makeover its operations. It wants to create a series of town squares, stores within stores, and other such nonsense. It all sounds like gibberish to me. How about this? Why doesn’t JCPenney just stock the items I want, provide a way for me to get the ones I can’t find online, merchandise the store in an attractive way, make it easier for me to find the items I want, and strike a balance between being overly attentive and having employees step over my body should I expire while visiting their department?

JCPenney is not Apple. It’s not the most interesting store in the world. It’s not the most interesting store in town. It’s definitely not a night on the town with the most interesting man in the world. However, becoming a more efficient store with better service, at least,  doesn’t sound like total B.S. With the investment of time and money, in combination with proper execution, JCPenney might get me to buy something other than underwear, on those rare occasions when I opt to go to the mall, rather than spend a lovely night at the ballet or playing Russian Roulette with the neighborhood loan shark.

Update: 3-18-12

Sleepy Burro

Even the Burro is Bored of JCPenney

Well, yesterday I opted out of going to the ballet with my wife and, instead, went to the mall. The mall isn’t my favorite place, but we had just gone out for a good dinner, my belly was full and I was under the influence of the large chunk of meat still digesting in my gut. Anyhow, she had a top she just had to buy at JCPenney, so I volunteered to go inside with her – just to check out the self-styled Apple of retailing.

As the Talking Heads used to say it was “the same as it ever was.” It looked like pretty much the same old boring JCPenney I remember from my mom dragging me around in  it (not this store, but one just like it) when I was a kid. Yes, there are a few minor changes. The merchandise is a little less cluttered. There are a few “store within a store” sections semi-clearly labeled as such. However, my overall impression was that this was the same JCPenney I went to before Christmas to make my annual underwear purchasing pilgrimage.

JCPenny still features the same cavernous and overwhelming shopping experience. You still have to search for a checkout as if JCPenney isn’t aware that signage and, perhaps, a more brightly colored checkout might help its hapless customers locate them. The checkout is still mostly manned, or should I say “wo-manned” by the same blue haired old ladies who likely operated a till back in the day when you used to have to pull down a handle to operate the thing.

One of the things that strikes me most about JCPenney is how difficult they make it for you to find what you want. There is very little line-of-sight. The ginormous Sephora store within a store at our location blocks out your view of much of the store from every angle. There is less signage indicating where you are than in a third world country. The thing that makes me angry is that I am sure that all of this is on purpose. Many retailers, including JCPenney seem to want you to have to wander aimlessly through a maze like some lab rat searching for a piece of cheese. They figure if they make you wander around long enough you’ll pick up some other useless crap you don’t need and buy it too, along with what you originally came into the store if you’re lucky enough to find it in the size and color you were looking for. That is, of course, one of the reasons I only shop for underwear, the occasional pair of socks, and the even rarer shirt or tie there.

I have simply chosen not to play the game that retailers such as JCPenney and Ikea (don’t even get me started on their hellishly nightmarish maze of a store near Chicago) are playing. I’m not a lab rat. I don’t enjoy wasting my time looking for things. I don’t like having to guess who the employees at JCPenney are, assuming you can find one who is not going to break, going home or pretending to be busy. That’s why I, like the most interesting man in the world, don’t always go to the mall, but when I do, I go to Barnes & Noble. At least at Barnes the merchandise location is clearly marked. The aisles are generally spacious. I can sit down and read an interesting to find out if I like it. Then, if I do find a book I like I can always go online to Amazon and order it. Sorry Barnes, the lowest price wins. As for me and the sleepy burro pictured above, we’d rather be home than wandering around lost, frustrated and ignored at JCPenney.

Categories: Business Tags: ,