Tag Archives: John Bay

J.C. Penney: CIT Cash Advances Still Flowing to Suppliers

By The Associated Press

SAN BRUNO, CA - FEBRUARY 28:  A customer leaves a JCPenney store on February 28, 2013 in San Bruno, California.  J.C. Penney Co. reported a 31.7 percent drop in fourth quarter earnings with a net loss of $552 million, or $2.51 per share compared with a loss of $87 million, or $0.41 one year ago. (Photo by Justin Sullivan/Getty Images)

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Justin Sullivan/Getty Images

PLANO, Texas — J.C. Penney says that CIT, the largest lender in the clothing industry, is still supporting deliveries from its suppliers. The department store operator also says it has ample liquidity to run its business.

Shares rose more than 7 percent in premarket trading Thursday.

On Wednesday, a New York Post report said that CIT Group Inc. (CIT) had stopped providing financial support to small and large suppliers selling to J.C. Penney stores — for now. The report said CIT made the decision after meeting with J.C. Penney officials to examine the company’s books.

J.C. Penney Co. (JCP) said Thursday that CIT assured it that the newspaper report is untrue.

CIT is what the industry calls a “factor,” which makes cash advances to suppliers based on the goods they sell to the merchant. If vendors and factors become wary of a store’s creditworthiness, the retailer may have to pay suppliers cash upfront for goods, which could be a huge drain on liquidity. If suppliers stop shipping goods, it can be a death knell for a retailer.

Plano, Texas-based J.C. Penney said that merchandise from CIT-supported suppliers currently makes up less than 4 percent of its overall inventory for the year.

J.C. Penney said that it still has the support of all of its key vendors, which are continuing shipments to the company. The retailer, which has 1,100 stores, anticipates closing the second quarter with about $1.5 billion in cash on its balance sheet.

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Shares climbed $1.09, or 7.5 percent, to $15.69 in premarket trading about two hours before the market open Thursday.

J.C. Penney is trying to reverse its fortunes after disastrous results under a failed transformation plan implemented by its former CEO Ron Johnson. Johnson was ousted in April after 17 months on the job. The board brought back former CEO Mike Ullman, who has reintroduced frequent sales and is bringing back key merchandise under store names like St. John’s Bay.

Analyst Deborah Weinswig of Citi Investment Research says J.C. Penney won’t see a recovery in its business until 2014. The analyst said in a client note that she’s been surprised that “quick fixes,” like bringing back coupons, hasn’t led to stronger sales and doesn’t think this will change in the near term. The analyst lowered the chain’s rating to “Sell” from “Neutral” and cut its price target to $11 from $20.

J.C. Penney doesn’t comment on analyst reports.

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Source: FULL ARTICLE at DailyFinance

J.C. Penney's Plan to Lure Back Its Lost Customers

By Matt Brownell

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AP

Earlier this year, J.C. Penney (JCP) CEO Ron Johnson made an about-face on his “no coupons” pricing strategy after recognizing that it was driving away once-loyal customers. Now the company is making another bid to regain lost shoppers by bringing back many of the clothing brands that it ditched as part of its makeover.

Speaking before Bank of America’s 2013 Consumer and Retail Conference, J.C. Penney CFO Ken Hannah acknowledged that the revamp of its clothing collections had scared off some of the retailer’s core customers.

“You’re going to see some assortment that was edited out that the customer has been screaming loud and clear that’s been missing,” he said. “So the basic denim, khakis, St. John’s Bay for women — [that was a] huge, huge miss when we edited that out and didn’t offer an alternative for that customer. They voted with their money and took it somewhere else, and that’s something we need to address.”

Hannah said that these phased-out brands will start returning to stores next month.

It’s the first time we’ve heard a J.C. Penney executive acknowledge that the company’s apparel revamp has been a serious misstep. But as Hannah notes, customers have been complaining for a while that the new JCP no longer caters to their fashion tastes. Last week we ran emails from several disgruntled shoppers who said they stopped shopping at J.C. Penney because they no longer found clothes they liked there.

In fact, many of those emails specifically identified the removal of the St. John’s Bay brand as their cause for leaving. With the brand — and other “basic” clothes — coming back, will those former customers give J.C. Penney another chance?

Readers Weigh In

Tiffany Hiza says she’s happy to learn that St. John’s Bay would be making a comeback.

“I would be very excited to see the St. John’s Bay line return!” she writes. “They had some of the best fitting tank tops and tees on the market that seem to fit a ‘real woman’s’ body regardless of age… [I’m] hoping to see the sales and merchandise I liked return soon.”

Another former customer, Jane Malone, also indicated that the brand’s return could get her back in the stores.

“If the clothes I love come back I will give JCP another chance,” she writes.

Hilarie Ryals was more cautiously optimistic, and told us that the retailer would need to do two things with the relaunch if it wants to win back its wayward customers.

“Number one, they must commit to offering the same fit, quality, and classic design as before,” she tells us. “If they offer items that are poor quality, use weird trendy colors and styles that don’t fit well, the relaunch will fail.”

Secondly, she says the company should apologize.<br …read more
Source: FULL ARTICLE at DailyFinance