2. Penney's Apoplexy -- published Nov. 16
Congratulations JC Penney (JCP) CEO Ron Johnson. You win. We here at the Five Dumbest Lab tried as best as we could to keep up with your maniacal pricing maneuvers and ever-shifting sales strategies, but you simply proved too much for us to handle.
Like your stock, which sank to 52-week low of $17 this week, we bow down to you.
So what finally made us submit? Why throw in the towel now after weathering all these weeks and months of Ron's recklessness?Believe it or not, it wasn't the humbled retailer's rotten third-quarter earnings report last Friday. The Plano, Texas-based company said it lost 56 cents per share, or $123 million, in the quarter, compared with a loss of $143 million, or 67 cents per share last year. Revenue dropped 27% year-over-year to $2.93 billion. Wall Street was looking for a loss of 15 cents a share on revenue of $3.27 billion. Yes, it was an absolutely ugly report, yet that wasn't the straw which broke our back. Nor for that matter was it the downgrades that arrived fast and furiously on Monday. Credit Suisse analyst Michael Exstein, for example, questioned Penney's long-term viability, writing: "JCP must find a way to significantly slow the sales decline within the next six months, and if it doesn't, management's attempt to 'bet the company' could become more problematic." Standard & Poor's, for its part, chopped the company's credit rating to B- from B+, saying: "The downgrade reflects recent performance that has remained poor and our view that it will continue to be weak over the next 12 months." Nope, that wasn't it either. We're used to Penney's getting downgraded by now; although the existential aspect certainly did raise our eyebrows considering the iconic nature of the 110-year old company. No, what really made us give up the ghost was Ron "No More Sales" Johnson's announcement Monday that JC Penney will host "its only sale of the year" on Black Friday. "All day long, customers will find some of our lowest prices ever and the chance to win amazing gifts, including once in a lifetime trips to great American destinations," said Johnson. "It's our way of kicking off the holiday season and saying, 'Merry Christmas, America!'" Lowest prices ever? Only sale of the year? Are you out of your mind Ron? What about the coupons you gave out last month? What about the "Month-Long Values"? What about the "12 promotional events each year"? What about the "Everyday" low prices? What about the "Best Price Fridays"? What about the end of "retail gimmicks"? What about the free haircuts? Aaaahhh!!! Enough Ron! Just stop it. We can't take it anymore. You promised us a "fair and square" pricing strategy and a break from all those ridiculous retail tricks of the past. Sadly, you broke our brains and a once-proud retail chain instead. Seriously, Hewlett Packard, what would we have done without you this year? Whenever things were going swimmingly on Wall Street and we had nothing dumb to write about, you never failed to do something historically inept and save our skin. And for this we will be forever in your debt.
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