Professor Elam

Monday Oct 30, 2017

We have reported on the serious going concern doubts about Sears SHLD. Now Penny's appears to be in the same life support, call Retail Hospice shape.

42 to 2.8 in 7 years.

I will be addressing this in class this week. JCP made the horrendous mistake of hiring former Apple Store Designer Ron Johnson.

Big Mistakes

Apple was not JCP and vice versa. Apple had about 20 products while JCP had thousands

Apple is a premium brand that never discounts anything.JCP customers were used to heavy discounting.

Johnson ignored suggestions for test marketing his ideas. Instead he attempted to changes hundreds of stores and a century long image, in one fell swoop. Think, Naopleon

invading Russia, whoops.

Johnson held JCP customers in disdain, they were not smart enough to understand his brilliant startegy.

Popular social mood towards Apple elevated the JCP stock to $42. As is so often the case, that parabolic move ended in collapse which is still underway.

The same thing happened at SHLD when Lampert took over, pop, then fizz.

Bottom line, there is something to be said for going by the book.