Can J.C. Penney Company, Inc. (NYSE:JCP) take a cue from Bon-Ton Stores, Inc. (NASDAQ:BONT) CEO
Hartford, CT 05/08/2013 (GDPInsider) – J.C. Penney Company, Inc. (NYSE:JCP) shares fell 3.07% to close at $16.40. The Texas-headquartered department stores retailer has a market capitalization worth $3.72 billion. J.C. Penney Company has been struggling ever since the appointment of CEO Ron Johnson, who has now been fired.
Former-Apple executive Johnson’s new turnaround strategy received lot of criticism after he announced several job cuts in the name of bringing profitability to J.C. Penney. Instead of making the retailer profitable, Johnson’s strategy witnessed adverse affects on the company’s revenue that declined 25% to reach $13 billion and net loss of $985 million.
Several retail analysts believed if Brendan Hoffman, who has been the CEO of the Bon-Ton Stores Inc. (NASDAQ:BONT) for just over a year now, could join J.C. Penney to help the company bring profitability. The company replaced Johnson with Myron E. (Mike) Ullman, III, who rejoined the Company as CEO. However, many feel Mike Ullman could be a temporary CEO with next permanent leaser yet to be named.
According to J.C. Penney’s new revelation, the company paid about $170 million for assembling Ron Johnson as and his team of three executives at top management level. The company’s stock has fallen over 51% since Johnson took the responsibility of CEO at the struggling J.C. Penney in 2011.
In addition to all CEO drama, J.C. Penney’s shares soared on the news of a hedge fund investors’ buying stake in the company. In the last week of April 2013, investor George Soros bought 7.9% stake in the company through his Soros Fund Management. The investment makes Soros as the fourth largest shareholder of J.C. Penney.
The company is trying hard to lure back its customers and recover from a 25% drop in revenue last year. Slew of job cuts gave a negative impact on the company’s brand that led to losing customers. J.C. Penney recently released a TV ad asking customers to “come back” to their store, and even apologized for changes made by ex-CEO Ron Johnson.
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Can Bon-Ton Stores’ CEO help J.C. Penney to get in profits
The Bon-Ton Stores, Inc. (NASDAQ:BONT) shares were up by 4.21% to close at $15.85. The department store operator in the United States sells apparel, accessories, footwear, cosmetics and home furnishings and has a market capitalization worth $305.80 million. The company operates 272 department stores, including 11 furniture galleries, in 24 states. The Bon-Ton Stores’s fourth quarter results were announced in March. The company announced revenue of $1.02 billion during the quarter. The earnings per share (EPS) were $3.71 for the quarter, beating the analysts’ estimate of $3.57. The company’s stock was recently downgraded by KeyBanc from a “buy” to a “hold” rating.
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