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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. 

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JCPenney JCP: Fantasy Stock Target Price, Fantasy Turnaround Plans

April 2, 2012 1 comment

JCP Chart

JCP data by YCharts

So much chart real estate, so little time over $40.00. Yet, so many stock analysts think JCPenney JCP is a $40.00 plus stock. If you clicked on the link above you’ll find the consensus JCP stock price estimate is $43.00. Yes, $43.00. Take a look at the chart above. how much plus $40.00 JCP stock price days do you see? Not many. Yes, that last price is $35.76. Kind of makes the low-ball $29.00 JCP analyst look a little brainier (or more honest) than the rest.

This kind of maddening stock price analysis is why I want to slap a JCP stock analyst and then slap the stock analyst again.

I’m no Ivy League educated stock guru, but does it take one to read a the JCP stock chart?

I’m not the only one who sees through JCPenney’s lame effort to become the Apple of retailing, everyone’s favorite store, or whatever brain dead slogan they have come up with the help of their army of senior-VP’s recruited from Target.

Steven P Dennis does yeoman’s work analyzing the river of B.S. emanating from the JCPenney corporate communications department here, here, and here.

Yes, nothing makes an old, stodgy and boring retailer like JCPenney more nimble like a whole other layer of VP’s to muck everything up.

But, back to the chart’s, here is a look at the JCP 6-month stock price chart.

JCPenney JCP 6-month stock price chart

JCP: Whee! We're a $40.00 stock and then we're not.

While the price of JCP has slid recently, looking at the 21-day detrended price oscillator at the bottom of the chart, it is currently very oversold, so we should expect it to bounce back somewhat.

It is important to note, however, that JCP has strong overhead price resistance around the $40.00 mark – just where so many stock analyst are convinced it will break through. Why? I’m not sure.

In addition, the JCP stock price fell through the bottom of the purple colored Andrew’s Pitchfork and crossed the white sell trigger line. The sell trigger line and then, the bottom of the Andrew’s Pitchfork, become price resistance.

So, JCP has a long, long way before it even gets close to $40.00.

Now, let’s look at the JCP 5-year chart.

JCPenney JCP 5-year stock price chart

JCP: I see, I see JCP struggle to break forty.

On the 5-year JCP stock price chart, if you look at the white line on the 21-day detrended moving price average chart, you’ll notice JCP has rarely peaked up over the $40.00 price line. Aren’t those JCP stock analysts sunny optimists?!? “This year is going to be the year!” they shout as they lick their giant lollipops and gallop off on their broomstick horses.

In contrast to the 6-month chart, the 5-year chart indicates that long-term the JCP stock price is still overbought. Ouch! So, while we may get a head-fake uptick in price, expect the medium-to-long-term price trend to be down rather than up.

J. C. Penney

J. C. Penney (Photo credit: Wikipedia)

Plus, with fantasy concepts such as a “store within a store” which I liken to concentric rings of Hell, JCPenney’s “plan” to revitalize their business with “everyday low prices” is as unbelievable as the stock analysts’ $43.00 JCPenney stock price target.

Sears SHLD Continues Price Slide

April 2, 2012 1 comment

SHLD Chart

SHLD data by YCharts

Despite the recent trip up to over $80.00, Sears SHLD continues to be in a long-term price decline.

But first, let’s look at a 1-year price chart for SHLD.

Sears SHLD 1-year price chart

Sears SHLD stock price rediscovers gravity

As the saying goes, “Gravity is a bitch”. After defying gravity over $80.00, Sears bounced over long-term price resistance represented by the white line. It is now being pulled down into the purple colored Andrew’s Pitchfork below.

The bottom part of the chart is the 21-day detrended price oscillator which basically indicates that Sears was overbought, but has now re-entered the channel, where we might expect it will journey down – eventually – to oversold status should it exit out the bottom of the channel.

Now, for the 5-year SHLD price chart.

Sears SHLD 5-year stock price chart

From the softer side of Sears to the softer side of SHLD stock price

The SHLD 5-year stock price chart reveals Sears has failed multiple times to cross the overhead white price resistance line.

The exterior of a typical Sears Essentials store.

Until, or unless, it manages to convincingly penetrate price resistance, expect Sears to continue its steady price descent long-term. While there may be shorter-term opportunities to trade the stock it doesn’t appear to be a long-term buy and hold opportunity.
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): 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. 

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.

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