J. C. Penney Company, Inc., through its subsidiary J. C. Penney Corporation, Inc., sells merchandise through department stores. The company primarily sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings; and provides services, including styling salon, optical, portrait photography, and custom decorating services. As of February 2, 2019, it operated 864 department stores in 49 states of the United States and Puerto Rico. The company also sells its products through its Website, jcpenney.com. The company was founded in 1902 and is based in Plano, Texas.
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When a company declares bankruptcy, its stock still trades, though its ticker symbol changes. That's what's currently happening with J.C. Penney (JCPN.Q), the struggling department store chain that has filed for Chapter 11 bankruptcy protection.
The news, however, is not good for investors who own shares of the company's stock. And while the company being rescued from bankruptcy helps a lot of people, that's not a reason for anyone to buy shares of J.C. Penney.
In a Chapter 11 filing, bondholders, unpaid creditors, lenders, and pretty much anyone or any institution the company owes money to gets consideration before the stockholders do. Usually, those stakeholders end up with more equity, and the company's stock either ceases to exist or the shares you own eventually come to represent a much smaller piece of the company.
The people who tout buying shares of bankrupt companies are day traders or speculators playing a dangerous game. They're treating the stock market like a casino (and they'll lose money in the end like anyone who has a system playing roulette or a "magical" method of beating slot machines).
JCPenney reached its peak number of stores in 1973, with 2,053 stores, 300 of which were full-line establishments. However, the company was hard hit by the 1974 recession with its stock price declining by two-thirds.
In 1983, JCPenney discontinued its appliance, hardware, outdoor equipment, and auto center departments, and also sold its automotive centers to Firestone. Also in 1983, it began selling goods online through the Viewtron videotex service. That same year, fashion designer Roy Halston, signed a six-year, $1 billion deal with JCPenney to sell a line of affordable clothing, accessories, cosmetics, and perfumes ranging in price from $24 to $200. The move was considered controversial then as no other high-end designer up to that point in time had licensed their designs to a mid-price retailer. The line, named Halston III, would not last long, as it would be poorly received and discontinued after about a year. However, the business move paved the way for other such high-end designers to sell their products at stores of varying price ranges in the future.
In 1984, JCPenney acquired the First National Bank of Harrington, Delaware and renamed it J. C. Penney National Bank. With the acquisition of the bank, the company became able to issue its own Mastercard and Visa Inc. cards. The company also began accepting American Express cards. Also that year, Thrift Drug began co-locating stores with Weis Markets, and acquired many former Pantry Pride properties. In April 1987, the company announced that it was moving its headquarters to Plano, Texas. After several years of development, the JCPenney Television Shopping Channel appeared on cable systems beginning in 1989. By the mid-1980s, all JCPenney stores had discontinued sales of firearms. Before this point, JCPenney carried rifles and shotguns branded as JCPenney but produced by numerous established firearms manufacturers. In the 1980s JCPenney's also stopped selling outdoor equipment and hardware such as lawn mowers and tools.
In early 2001, J. C. Penney closed 44 under-performing stores. In 2001, J. C. Penney sold its direct-marketing insurance unit to Dutch insurer Aegon for $1.3 billion (equivalent to $1.99 billion in 2023) in cash to help refocus the company on retail. In 2003, the company opened three stores in strip centers in Texas, Minnesota and Indiana. The new one-level, 94,000 sq ft (8,700 m2) format stores focus on convenience with wider aisles and centralized checkouts. In 2004, the company added 14 more stores and exited the drug store division after 35 years, with the sale of its Eckerd division. The company also sold its six Mexico stores to Grupo Carso, which rebranded five of the stores as Dorian's and the other one as Sears Mexico. In 2005, J. C. Penney's e-commerce storefront exceeded the one billion dollar revenue mark for the first time.At the same time in June, the company would sell off its shares of Lojas Renner, the Brazilian-based retailer. Generating $260 million from the sale as it discontinues its operations with Renner and its Latin American footholds as well.
On December 7, 2011, J. C. Penney purchased 16.6% of Martha Stewart Living Omnimedia stock. J. C. Penney planned to put "mini-Martha Stewart shops" in many of its stores in 2013, as well as create a website with Martha Stewart Living.
In August, J. C. Penney began rolling out a store-within-a-stores with different jean brands and had plans to eventually roll out 100 shops in 683 stores. That month, the company posted a second-quarter comparable-store loss of 22%, with internet sales dropping 33%. At an analyst meeting in New York the same day, Johnson said, "I'm completely convinced that our transformation is on track." J. C. Penney's stock rose 5.9% on Johnson's comments at the analyst meeting, the largest single-day stock increase since late January 2012. In 2012, fourth quarter sales for J. C. Penney were poor. Sales were down 28.4% from a year earlier and same store sales were down 32%. Strategic choices made by Johnson a year earlier, including the change in pricing strategy, were being called into question. It was announced in April 2012 that Nickelson Wooster would become the creative director for J. C. Penney menswear.
On April 8, 2013, Johnson was fired from J. C. Penney after 17 months with the company. Mike Ullman, the retailer's former CEO, was announced as his replacement shortly afterwards. In August, William A. Ackman, of Pershing Square Capital Management, continued his efforts to remove Thomas Engibous, the company's chairman of the board of directors. However, Ackman resigned from the board on August 12, and two new directors were subsequently appointed to the board, one of whom was former Macy's vice chairman Ronald Tysoe. On September 26, 2013, J. C. Penney, with Goldman Sachs as the sole underwriter, announced plans to issue 84 million shares of its stock. The move stood in contrast with CEO Mike Ullman's remarks from earlier that day, whereby he did not foresee "conditions for the rest of the year that would warrant raising liquidity".
On January 15, 2014, J. C. Penney announced it was closing 33 under-performing stores and laying off 2,000 employees. J. C. Penney's stock continued its decline until their first quarter results in 2014 showed signs of improvement, and sent the share value back into the double digits. In October, it was announced that the company would be tapping former Home Depot executive Marvin Ellison to take on the role of CEO starting in November.
In January 2015, it was announced that J. C. Penney would close 39 under-performing stores nationwide and lay off 2,250 employees. That same year, the company announced that it was liquidating its The Foundry Big & Tall Supply Co. chain of standalone clothing stores. In January 2016, J. C. Penney announced plans to relaunch its business of selling major appliances to target a wave of millennials who are buying first-time homes. In February, J. C. Penney opened a support center in Bangalore, India.
In 2018, J. C. Penney closed permanently at Plaza Palma Real in Humacao, Puerto Rico, after Hurricane Maria devastated the store in September 2017. In May, J. C. Penney reported an adjusted loss of $69 million in the first quarter, even worse than Wall Street predicted, and lowered its projections for the year. Sales fell 4%, also missing estimates. Earlier in 2018, the company announced it would cut 360 jobs at its stores and corporate headquarters. The company lowered its earnings forecast for the year to 13 cents per share at best, and said it could lose as much as 7 cents. J. C. Penney finished the quarter with just $181 million in cash, down from $363 million a year ago. Much of the big decrease was because of a $190 billion debt replace. On May 22, J. C. Penney announced the resignation of their CEO, Marvin Ellison. On October 2, J. C. Penney announced former Jo-Ann Stores CEO Jill Soltau as their CEO, effective October 15. With the announcement, JCPenney's shares rose 9%. The company ranked 235 on the Fortune 500 list of the largest United States corporations by revenue. She has also brought new talent and has cleaned out inventory. On December 26, the stock price of J. C. Penney (NYSE: JCP) fell below $1 per share. This was the first time shares fell below $1 ever in the 110-year history of the company, which started trading on the New York Stock Exchange in 1929. The stock fell 68% over the course of 2018, including a 30% drop in December 2018 alone. 781b155fdc