Tag Archives: Mike Ullman

Business, Finance, Occupation & Industry

What is Supply and Demand?

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By Selena Maranjian

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April is Financial Literacy Month, and our goal is to help you raise your money IQ. In this series, we’ll tackle key economic concepts — ones that affect your everyday finances and investments — to help you make smarter choices with every dollar decision you face.

Today’s concept: supply and demand.

Most folks are familiar with the concept of supply and demand, but most of us also don’t give it much thought, which is a mistake. That’s because it applies to much more than just business.

First, to review. In basic economics, the law of supply and demand influences prices. If supply of an item is abundant, that will pressure the price downward, and vice versa. In practice, imagine that you’re the only one in town selling shoehorns. Because consumers don’t have any other places to buy the product, that gives you some pricing power. But if other stores in town start carrying shoehorns, you may have to drop your price to keep customers coming.

In the Stock Market

Similar principles are at work in the stock market. Once stocks are launched into the market via an initial public offering, or IPO, their prices aren’t set by the companies behind the stocks, or even the brokerages processing the trading. Instead, they reflect the shares’ supply and demand.

As an example, think of retailer J.C. Penney (JCP). Its stock closed at $15.87 per share on April 8. But on April 9, it closed around $13.92, down more than 12 percent in a single day.

What happened? Well, the struggling company’s CEO, Ron Johnson, was dismissed, replaced by a former CEO, Mike Ullman. The fact that the stock price sank reflects a lack of confidence in the company — or a lack of demand for its shares. If investors were more optimistic about the company and Ullman’s leadership potential, demand for its shares would have risen, driving the price up.

Meanwhile, shares of Yahoo (YHOO) have surged more than 50 percent since Marissa Mayer took the reins of the company. That increase reflects confidence in her leadership and the company’s future — via an increased demand for shares.

In Our Lives

Shortages and surpluses affect other areas of our lives, too, such as careers. There’s a good case to be made for pursuing the career that most excites you, but you would also do well to factor in the supply and demand for that occupation and others.

There are many lists of jobs that are expected to be in great demand in the coming years. The folks at Randstad, for example, a major global staffing company, have listed “13 Hot Jobs for 2013.” They include registered nurses, physicians (specializing in urgent care and anti-aging medicine), drug safety specialists, mortgage underwriters, loan documentation specialists, accountants, manufacturing production specialists, industrial

From: http://www.dailyfinance.com/2013/04/16/supply-and-demand-definition/

Business, Finance, Occupation & Industry

J.C. Penney Stock Could Be Headed for Single Digits After CEO Shakeup

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By Adam Levine-Weinberg, The Motley Fool

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For more than a year, I have been following the transformation fiasco at J.C. Penney . On Feb. 5, 2012 — as the stock was nearing its peak above $40 — I suggested that the company was “the Netflix of 2012″, referring to Netflix’s 75% fall from peak to trough during 2011. Sure enough, J.C. Penney stock has fallen nearly 70% since I suggested back then that investors should sell or short the company:

J.C. Penney Stock Chart (Feb. 1, 2012-present), data by YCharts.

J.C. Penney’s dreadful performance can be attributed primarily to the ambitious but poorly tested transformation plan implemented by CEO Ron Johnson shortly after his arrival at the company. Johnson’s merchandise changes and attempts to dramatically scale back the use of coupons and sales alienated many previously loyal customers. On Monday afternoon, J.C. Penney’s board confirmed the inevitable, firing Johnson after only 17 months on the job.

The new (old) boss
Unfortunately for shareholders, J.C. Penney stock dropped by more than 10% when the markets reopened on Tuesday. Apparently, Mr. Market wasn’t inspired by the J.C. Penney board’s choice of successor: Mike Ullman. Ullman was the CEO who was pushed out in 2011 to make room for Johnson. At the time of Johnson’s hiring, shareholders were delighted to get rid of Ullman. In fact, J.C. Penney’s largest shareholder, activist investor Bill Ackman, was instrumental in bringing Johnson on board. It is somewhat understandable that shareholders were happy to show Ullman the door; J.C. Penney stock delivered a total return of approximately negative 12% in the six-and-a-half years between when Ullman became CEO and when Johnson’s hiring was announced:

J.C. Penney Total Return (December 2004-June 2011) data by YCharts.

To some extent, Ullman was playing with a bad hand; his previous tenure included the Great Recession, which decimated nearly all retail stocks. That said, Kohl’s was able to contain the damage from the recession, and Macy’s has bounced back very strongly, posting four straight years of double-digit EPS increases. Meanwhile, J.C. Penney was already on the way back down when Ullman left, with same-store sales down 1.6% and gross margins down 160 basis points year-over-year in his last quarter at the helm, driving lower adjusted EPS.

J.C. Penney stockholders thus have good reason to doubt that Ullman has any good answers for the company’s woes. The company’s long-term underperformance vis-a-vis Macy’s and Kohl’s is largely the result of its stodgy image and aging customer base. As I wrote back in February, bringing back sales won’t necessarily bring back profits (or customers) for J.C. Penney. In fact, there are some good reasons to believe that performance will continue to slide; when all is said and done, J.C. Penney stock could be sitting in the single digits.

Challenges ahead

It seems all but certain that first-quarter sales have been dreadful, and I expect J.C. Penney to lose even more money than it did last year, when it posted an adjusted

From: http://www.dailyfinance.com/2013/04/11/jc-penney-stock-could-be-headed-for-single-digits/

Business, Finance, Occupation & Industry

Apple, Go Get Ron Johnson Back. Now.

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By Evan Niu, CFA, The Motley Fool

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Way back in June 2011 when Apple lost retail chief Ron Johnson to J.C. Penney , it was seen as a huge loss for Apple and a big win for J.C. Penney. Johnson accepted the promotion, becoming CEO of the struggling department store chain. Nearly two years later, it would seem that Johnson wasn’t such a victory for J.C. Penney after all.

JCP data by YCharts.

Shares lost 55% of their value under his tenure (not including the 12% drop the following day after Johnson’s predecessor, Mike Ullman, was rehired). J.C. Penney is an entirely different breed of retailer compared to the Mac maker. Johnson’s strategy of removing discounts, coupons, and sales in favor of more transparent pricing didn’t resonate with consumers, and J.C. Penney’s sales suffered for it.

Well, as luck would have it, Johnson’s former position at Apple is still up for grabs, following John Browett’s departure in October. Since then, Apple has been searching for a new retail chief, with retail operations falling under CEO Tim Cook’s jurisdiction in the interim. Browett came from the U.K.’s Dixons chain, and the British exec later said that he simply “just didn’t fit” at Apple, maintaining that he wasn’t rejected for a lack of competency. Browett failed to see the big picture, trying to save costs without realizing that cost cutting is the last thing that Apple should do, especially if the customer experience is the thing getting shortchanged.

Apple Retail has been doing just fine
Since Johnson’s departure, it’s not as if Apple’s retail operations have struggled. Far from it — Apple retail has grown and has now generated $19.2 billion in trailing-12-month sales.

Source: SEC filings. Calendar quarters shown. TTM = trailing 12 months.

The company has also expanded its total store count by 74 stores to 401, up from 327 when he left. Most of this expansion has been internationally, as Apple’s domestic retail footprint is rather mature and the company is rightly focusing abroad.

Source: Apple conference calls. Calendar quarters shown.

Foot traffic is also up, with record 120 million visitors last quarter. Average quarterly revenue per store is also flirting with all-time highs at $16.3 million in the fourth quarter.

Source: Apple conference calls. Calendar quarters shown.

Clearly, Apple isn’t in dire need of Johnson to return. But at the same time, Apple Retail lacks dedicated leadership right now, and Johnson gets Apple. This is the guy that launched Apple Retail in the first place, promptly silencing critics that initially derided the move as misguided and doomed to fail. The Genius Bar is now the paragon of modern customer tech support, the type of notion that’s mostly lost in a department store environment.

Other tech giants have since tried to emulate Apple’s retail strategy, most notably Microsoft and Samsung. Microsoft Retail stores bear more than a passing resemblance to

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Dow Keeps On Keeping On

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By Jeremy Bowman, The Motley Fool

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The Dow Jones Industrial Average hit yet another record high today, as stocks had a late-day run for the second session in a row today. The buying activity seems to indicate increased optimism about earnings season as the blue chips finished at 14.673, up 60 points or 0.4%, momentarily climbing above 14,700. Investors have now had a two-day breather from any significant economic reports or macroeconomic events, and stocks have made solid gains both days. Despite the continuing bull run, however, there have been 4.7 times as many negative pre-announcements as positive ones, the worst proportion since 2001, according to Thomson Reuters, indicating that there may be reason to fear earnings season.

Tech stocks led the Dow today, as Microsoft and Intel both moved up more than 3%. The Windows maker joined a group of tech companies including Oracle and Nokia filing a complaint against Google in the European Union, which accused the search giant of anti-competitive behavior in its Android strategy. One of the group’s lawyers called Android “a Trojan horse used to deceive partners, monopolize the mobile marketplace, and control consumer data.” Google has become a major rival of Microsoft’s in recent years, as Google vies for dominance in software with its Chrome Internet browser and Google Docs office products. Microsoft, on the other hand, has challenged Google’s search leadership with Bing and is also gunning for a piece of the smartphone and tablet market.

Intel, meanwhile, finished up 3.1% after it unveiled its new Thunderbolt interface technology yesterday, which runs at twice the speed of the previous model. The top chipmaker also said that it had begun shipping samples of a system-in-a-chip, known as “Avoton,” to Hewlett-Packard to be used in its new Moonshot servers. HP also finished the day up 1.5%.

One other sector flying high today was solar as First Solar jumped 46% after acquiring TetraSun, a Silicon Valley start-up, and providing an outlook way above Wall Street‘s estimates. The TetraSun acquisition, for an undisclosed amount, gives First Solar access to the higher-efficiency solar-panel market that its own panels are not suited for. The company also estimated EPS for the year to come in between $4 and $4.50, while Wall Street had projected just $3.51. The rally led other solar stocks up as well, as Yingli Green Energy finished up 21% and Trina Solar gained 15%.

On the other side of the spectrum, J.C. Penney dropped 12% as investors reacted to Ron Johnson‘s dismissal and replacement with Mike Ullman, the retailer’s former CEO. Johnson’s termination marks the end of a misadventure that included a new shops-within-the-shop strategy as well as the elimination of discounts that caused sales to drop by more than 25% last year. First-quarter same-store sales are also down 10% at Penney so far, according to The Wall Street Journal, indicating that the pain is far from over. What Mike Ullman‘s plans for the department-store …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

3 Reasons J.C. Penney Is Living on Borrowed Time

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By Dan Caplinger, The Motley Fool

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J.C. Penney announced yesterday that CEO Ron Johnson was stepping down from the helm of the beleaguered discount retailer, naming former top executive Mike Ullman to take his place and return to the position he held from 2004 until Johnson’s hire in 2011. In response, the shares fell more than 12% today, extending a decline that has lopped 60% off J.C. Penney’s stock price in the past year.

Despite the rising chorus of calls for Johnson’s ouster, investors clearly agree that J.C. Penney’s move today isn’t the right answer. Here are three reasons why.

1. Meet the new boss — same as the old boss.
Trying something new only to have it fail is always discouraging. But it’s even more discouraging to see a company choose to throw away the entire past year and a half without learning any lessons from its failure.

To understand how big a step backward this is for Penney, you have to go back to 2011. At the time, it was struggling, having plunged like most of its peers during the financial crisis and then getting left behind in the economic recovery that lifted shares of most of its rival retailers. Activist investor Bill Ackman, who argued for a shakeup in J.C. Penney’s management, noted repeatedly how Ullman failed to manage the company well and gave investors dismal share-price performance. It’s hard to believe that the best the company could do for leadership was to bring Ullman back. If he chooses to ignore the hard-won lessons that Johnson helped J.C. Penney learn, then it’ll be hard for investors to have any confidence that the retailer is likely to find a path out of its troubles.

2. Turning back isn’t an option.
Some investors likely believe by now that they’d be better off if J.C. Penney had never strayed from its coupon-and-discount model in the first place. Even if they’re right, the company can’t assume that by returning to that model now, customers will come back.

Once-loyal customers who felt betrayed by Penney’s strategic shift largely fled to competitors. Some stepped up to upscale retailer Macy’s, which has seen a real revival in its business over the past year. Others likely went to fellow discounters TJX and Ross Stores, both of which have executed very well by offering name-brand merchandise at deep discounts to normal retail prices. For Penney to try to win those customers back would take a huge investment, and even then, having been burned once, they’ll never have the same loyalty they once had to the retailer.

Source: Retail Industry Total Return Price data by YCharts.

3. Big-box retail is on its way out.
As if it weren’t bad enough that its competitors have benefited from its woes, J.C. Penney has to deal with the longer-term trend that has threatened not just it but big-box retail in …read more

Source: FULL ARTICLE at DailyFinance

News, Politics, Government

J.C. Penney Needs to Reinvent Reinvention

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By Jonathan Salem Baskin, Contributor

Yesterday’s ouster of JCP‘s CEO Ron Johnson came as no surprise to anybody who has witnessed the company’s tumble into chaos over the past year (I wrote about it here). It’s not the first company to hire a “visionary” leader to transform itself: HP did it with similarly horrible results, and it’s too soon to tell if it’ll work at Yahoo. Now, JCP is going to reinvent itself again with the return of its former CEO, Mike Ullman. …read more

Source: FULL ARTICLE at Forbes Latest

Business, Finance, Occupation & Industry

Dow May Open Higher After Alcoa Beats the Street

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By Roland Head, The Motley Fool

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LONDON — Stock index futures at 7 a.m. EDT indicate that the Dow Jones Industrial Average may open 12 points higher this morning, while the S&P 500 may open up by 0.19%.

Markets in Europe edged higher this morning after U.S. aluminum giant Alcoa beat earnings forecasts and China reported that inflation fell further than expected in March, boosting hopes that the Chinese government will continue its monetary-stimulus efforts. Among the biggest risers were mining shares, which helped lift the FTSE 100 by 0.47% by 7:20 a.m. EDT. In Europe, a new OECD report sounded a warning that Slovenia could soon follow Cyprus into bankruptcy if its banking sector is not recapitalized. In the U.K., new figures showed that exports fell by 2.8% in February, while industrial output rose by 1%. German exports also fell: Exports from Europe‘s biggest economy were down by 1.5% in February, while imports fell by 3.8%.

Today’s U.S. economic reports include the NFIB small-business index for March, which fell from 90.8 in February to 89.5, slightly ahead of expectations of 89.2. At 10 a.m. EDT, wholesale inventories are expected to have risen by 0.6% in February after gaining 1.2% in January. February’s Job Openings and Labor Turnover Survey is also due at 10 a.m. EDT.

Last night Alcoa reported first-quarter adjusted earnings of $0.11 per share on sales of $5.83 billion, beating analysts’ expectations for adjusted earnings of $0.08 per share but missing the $5.88 billion consensus forecast for revenue. Alcoa is widely seen as a predictor for the wider market, and despite the revenue miss, these results have been seen as a ‘beat’ and raised hopes that corporate earnings will be stronger than expected across the S&P 500.

Other stocks that may be actively traded today include J.C. Penney. The retailer’s shares were 8.66% lower in premarket trading this morning after the company announced last night that CEO Ron Johnson will leave the company after less than two years in the post to be replaced by his predecessor, Mike Ullman. J.C. Penney’s stock price has halved since former Apple exec Johnson took control, and his turnaround plan is now widely seen as a failure that has alienated loyal customers without attracting new ones. Iron ore miner Cliffs Natural Resources was also higher in premarket trading following gains for commodity stocks in Europe.

Finally, let’s not forget that the Dow’s daily movements can add up to serious long-term gains. Indeed, Warren Buffett recently wrote, “The Dow advanced from 66 to 11,497 in the 20th Century, a staggering 17,320% increase that materialized despite four costly wars, a Great Depression and many recessions.” If you, like Buffett, are convinced of the long-term power of the Dow, you should read “5 Stocks To Retire On.” Your long-term wealth could be transformed, even in this uncertain economy. Simply click here now to download this free, no-obligation report.

The article Dow May Open Higher After Alcoa Beats the Street originally …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

Macy's, J.C. Penney Resume Court Battle Over Martha Stewart

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By The Associated Press

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David Handschuh, The (New York) Daily News/AP Martha Stewart testifies in New York State Supreme Court on March 5. Stewart, 71, is at the center of a bitter legal battle between Macy’s and J.C. Penney that resumed Monday.

By ANNE D’INNOCENZIO

NEW YORK — Attorneys for J.C Penney and Macy’s were back in court Monday to fight over the Martha Stewart brand after a monthlong mediation period went nowhere.

But after the hearing, the real action began. J.C. Penney Co. (JCP) said late Monday, that the company’s board of directors has ousted CEO Ron Johnson after only 17 months on the job and rehired Johnson’s predecessor, Mike Ullman, 66, who was CEO of the department store chain for seven years until November 2011.

The case, which centers on Macy’s Inc.’s (M) claim that Penney’s deal to sell Martha Stewart branded-merchandise infringes on its own deal with the domestic diva, was likely just one of the reasons Johnson was shown the door. He also had presided over a price strategy that confused customers and drove them away.

The court-ordered mediation followed nearly three weeks of testimony from witnesses including the domestic diva herself, Penney, Johnson and Macy’s CEO Terry Lundgren.

At issue is whether Macy’s has the exclusive rights to sell some Martha Stewart branded products such as cookware, bedding and bath products. Macy’s sued Martha Stewart Living Omnimedia Inc. (MSO), arguing that the company breached its long-standing contract when it signed a deal with Penney in December 2011 to open Martha Stewart mini-shops, planned for this spring. It also sued Penney, contending that it had no regard for the contract and that Johnson had set out to steal the business that Macy’s had worked hard to develop.

The stakes are high for all three companies involved but particularly for Penney, which is counting on a revamped home area to help it rebound from a disastrous year. The company amassed nearly $1 billion in losses and its revenue dropped about 25 percent as the first year of a transformation plan built around a new pricing strategy failed to resonate with shoppers.

Penney was counting on the overhauled home department as part of its bigger plan to turn Penney stores into mini-malls of sorts. It’s in the midst of rolling out 20 shops in its home area featuring products from such designers as Michael Graves and Jonathan Adler. Martha Stewart mini-shops were expected to anchor the home area.

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But those plans are in limbo. Penney had ordered goods like towels and cookware from Martha Stewart Living and were planning to name the goods JCP Everyday, to sidestep a conflict. But Macy’s is trying to stop the retailer from selling goods covered by Macy’s exclusive category even if they don’t carry the Martha …read more

Source: FULL ARTICLE at DailyFinance

Business, Finance, Occupation & Industry

J.C. Penney Taps Former CEO Mike Ullman to Revive Its Fortunes

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By The Associated Press

jcpenney ceo mike ulllman ron johnson ousted

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Mark Lennihan/AP Mike Ullman was named CEO of J.C. Penney after Ron Johnson was ousted Monday, after a massive restructuring at the retailer backfired.

By ANNE D’INNOCENZIO

NEW YORK — J.C. Penney is hoping its former CEO can revive the retailer after a risky turnaround strategy backfired and led to massive losses and steep sales declines.

The company’s board of directors ousted CEO Ron Johnson after only 17 months on the job. The department store chain said late Monday, in a statement, that it has rehired Johnson’s predecessor, Mike Ullman, 66, who was CEO of J.C. Penney Co. (JCP) for seven years until November 2011.

The announcement comes as a growing chorus of critics including a former Penney CEO, Allen Questrom, called for Johnson’s resignation as they lost faith in an aggressive overhaul that included getting rid of most discounts in favor of everyday low prices and bringing in new brands.

The biggest blow came Friday from his strongest supporter, activist investor and board member, Bill Ackman, who had pushed the board in the summer of 2011 to hire Johnson to shake up the dowdy image of the retailer. Ackman, whose company Pershing Square Capital Management, is Penney’s biggest shareholder, reportedly told investors that Penney’s execution “has been something very close to a disaster.”

On Saturday, Ullman received a phone call from Penney’s chairman Thomas Engibous asking him to take back his old job, according to Penney spokeswoman Kate Coultas. The board met Monday and decided to fire Johnson.

Neither Johnson nor Ullman were available for an interview.

Until early last week, some analysts thought the board would give Johnson, a former Apple Inc. (AAPL) and Target Corp. (TGT) executive, until later this year to reverse the sales slide. A key element of Johnson’s strategy was opening new shops featuring hot brands to help turn around the business. They began opening last year and had been faring better than the rest of the store.

“I truly believed that he had until holiday 2013,” said Brian Sozzi, CEO and chief equities strategist Belus Capital Advisers. “Today’s announcement is an indictment of his strategy.”

Under Ullman, the chain brought in some new brands such as beauty company Sephora and exclusive names like MNG by Mango, a European clothing brand, but he didn’t do much to transform the store’s stodgy image or to attract new customers. He’s expected to serve mostly as a stabilizing force, not someone who will make changes that will completely turn the company around.

“What they need is a little bit of stability and essentially adult supervision,” said Craig Johnson, president of Customer Growth Partners, a retail consultancy. “[Ullma]) did nip-and-tuck surgery. But this was a place that needed radical surgery,” Johnson said.

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Sozzi said he …read more

Source: FULL ARTICLE at DailyFinance

News, Politics, Government

Ron Johnson Out At J.C. Penney, Replaced By Former Chief Mike Ullman

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By Steve Schaefer, Forbes Staff

Former Apple executive Ron Johnson came to department store chain J.C. Penney in 2011 with great fanfare and a pledge to reverse the retailer’s fortunes with an ambitious turnaround. But less than two years later the executive is out, and will be replaced by his predecessor Mike Ullman. …read more

Source: FULL ARTICLE at Forbes Latest