JCPenney tanks from new pro-gay policy

In November 2011, the family department store JCPenney hired a new CEO named Ronald Johnson, in a bid to reverse its declining sales. The company’s stock value started to improve, until February 2012, when Johnson initiated a new (but undeclared) pro-homosexual policy.

First, the company hired out-lesbian Ellen DeGeneris to be its public face and spokesman. Then, in its Mother’s Day and Father’s Day catalogs, JCPenney aggressively courted the LGBT “community” with ads of two mommies and of two daddies. [See my post of June 2, "Something is rotten at J C Penney."]

The new policy has alienated Christians who still make up the majority of Americans. JCPenney’s aggressive courting of homosexuals is all the more puzzling because, according to the U.S. Census, homosexuals (same sex households) constitute less than 2% of U.S. households.

It is noteworthy that JCPenney’s stocks, which had gone up after Johnson became CEO, precipitously declined beginning precisely in February 2012, when DeGeneris became the company’s public face. Today, JCPenney’s stocks are worse than before Johnson.

Here’s JC Penney’s stock performance from May 2011 to May 2012. (Click chart to enlarge)

View the full NYSE:JCP chart at Wikinvest

Note that Ron Johnson took over the company’s leadership in November 2011. JCPenney’s stock value rose to its highest in February 2012. Since then, the value systematically declined. By May 2012, JCP’s stock value was LOWER than when Johnson took over the helm!

Since May 2012, JCP’s stock value has continued to decline. Below is its stock performance for the last three months, as of Wed., July 11, 2012, 4:00 PM EDT|USD (source: Morning Star):

Yesterday came even worse news.

The credit-rating agency Standard & Poors downgraded its rating for JC Penney Co. Inc. from BB- to B+. S&P’s evaluation of JCPenney’s outlook is “Negative”.

Here’s what S&P says about JCPenney in greater detail:

J.C. Penney Co. Downgraded To ‘B+’ On Ongoing Weak Expected Performance And Credit Metrics; Outlook Negative

Publication date: 11-Jul-2012 15:31:11 EST

• Performance at U.S. department store operator J.C. Penney remains weak, resulting in a meaningful deterioration of credit protection metrics.
• We expect that there could be further operational issues over the next year as the company implements its new pricing and merchandising strategy.
• We are lowering our corporate credit rating on the company to ‘B+’ from ‘BB-’ and removing all ratings from CreditWatch with negative implications. The outlook is negative.
• The negative rating outlook reflects our view that the new pricing and merchandise strategy will cause further disruptions to operations, and that the potential for further performance erosion remains elevated over the next few quarters.

The ratings on Penney reflect Standard & Poor’s assessment that the company’s business risk profile is “weak” and its financial risk profile is “highly leveraged.” Our business risk assessment incorporates our analysis that the department store industry is highly competitive with large, well-established participants.

“Based on this environment, it is out view that further performance difficulties may result in the loss of market share to other players, such as Macy’s, Kohl’s, Dillard’s, or other department stores or specialty retailers.”

J&P’s assigned credit ratings range from the highest to the lowest: AAA → AA → A → BBB → BB → B → CCC → CC → C → D

On its website, S&P offers this explanation of its credit rating:

A credit rating is Standard & Poor’s opinion on the general creditworthiness of an obligor, or the creditworthiness of an obligor with respect to a particular debt security or other financial obligation. Over the years credit ratings have achieved wide investor acceptance as convenient tools for differentiating credit quality.

S&P’s credit ratings can be and are used to inform investment decisions.

To compare JCPenney to two of its competitors, the most recent S&P’s rating (April 10, 2012) for Macy’s Inc is “BBB” and “Outlook STABLE”. S&P’s rating for Nordstrom is even higher: a credit rating of A- and “Outlook STABLE”.

All of which leaves the interested observer perplexed about JCPenney’s self-destructive pro-gay policy. Aren’t capitalists motivated by profit? In JCPenney’s case, the answer apparently is “No.” For Ron Johnson, who recently was rewarded for his questionable performance with a promotion from CEO to JCP’s president, political ideology clearly trumps profit.

And I will continue to boycott JCPenney!

~Eowyn

Something is rotten at J C Penney

On September 27, 2011, the Los Angeles Times reports that the U.S. Census Bureau admitted that its 2010 census had vastly over-estimated the number of same-sex (i.e., homosexual) households. The plain truth is this:

Homosexuals comprise less than 1% of U.S. households.

And yet this tiny numerical minority now controls what is being taught in our public government schools; what we see on TV and in movies; what we hear in pop music; state courts; and increasingly, national and state government policies. At the same time, we are not being told by our schools, media, and government the dangerous sexual practices of gays and those practices’ terrible consequences.

Sure looks to me there is a systematic AGENDA that is being pushed and foisted on the American people.

J. C. Penney, the century-old family department store of $17.3 billion in annual revenue, is part of that effort.

In February 2012, J. C. Penney chose out lesbian Ellen Degeneris to be the company’s spokesman.

In May, the company featured a lesbian couple in its Mother’s Day promotion. (Read more about this in Sage’s post of May 3, 2012.)

The text in the above ad says:

Wendi with her mom Carolyn, daughters Raven and Clover, and partner Maggie.

You’ll often find Wendi, her partner, Maggie, and daughters elbow-deep in paint, clay or mosaics. “Even as babies, the girls toddled around in diapers, covered in paint,” said Wendi. They come from a long line of artists, which includes grandma Carolyn. Visiting her art studio in Granbury, Texas is a favorite outing. And like any grandma, this one loves to bake — pottery, that is.

Now, J. C. Penney is releasing a Father’s Day ad depicting two gay men and their children.

The ad, published in JCPenney’s June catalog, states that a father is a “swim coach, tent maker, best friend, bike fixer and hug giver – all rolled into one. Or two.” Below the picture of a smiling homosexual couple playing with a little boy and girl, the ad reads: “Real-life dads, Todd Koch and Cooper Smith with their children Claire and Mason.”

This gay agenda can only be made at the highest level of JCPenney — the Chief Executive Officer (CEO). And just by coincidence (not!), the company had a new CEO named Ronald B. Johnson come on board last November 2011. This is what I found out about him:

Ron Johnson

Ron Johnson, 53, has a B.A. from Stanford University and an MBA from Harvard Business School. Before he joined JCPenney in November 2011, Johnson was the Senior Vice President of Retail Operations at Apple Inc., where he is credited for pioneering the concept of the Apple Retail Stores and the Genius Bar. Before Apple, Johnson had worked for Target (another aggressively gay-promoting store) as its vice president of merchandising, and at Mervyns.

In leaving Apple, Johnson also left his annual salary of $700,014, as well as other compensations such as stocks which, together with his salary, came to a total compensation of a whopping $29.795 million. It has been reported that Johnson earned $400 million during his 7½ years at Apple.

Johnson left all that for JCPenney, where his annual salary is $1.5 million which, added to a bonus of $1.88 million, makes his total compensation at JCPenney a paltry $3.38 million. In other words, Johnson’s total annual compensation at JCPenney is $26.42 million less than at Apple.

Who does that? — leave a highly prestigious company (Apple) for a dowdy department store at a financial loss of $26.42 million a year?

According to a Fortune article by Jennifer Reingold, “Ron Johnson: Retail’s New Radical,” March 7, 2012, the reason is Johnson relishes the challenge of running his own company! He believes in it so much that he reportedly invested $50 million of his own money in J.C. Penney warrants.

At a special event last January at Manhattan’s Pier 57 before 1,200 reporters, analysts, vendors, and retail celebrities such as Calvin Klein and Martha Stewart, Johnson unveiled his vision for JCPenney, which has been stagnating for years, its revenues and profits lower in 2011 than they were 15 years ago. He declared he would turn the department store from “a dowdy brand aimed at the middle class at a time when the middle class itself is in peril — into ‘America’s favorite store’ by the end of 2015. Not America’s favorite department store, mind you; America’s favorite store of any type.”

Johnson vision consists of:

• A radically simplified pricing strategy of only three price categories: “everyday” (about 40% off the old retail price); a monthly sale on certain items; and a final, “best” price.

• A slimmed-down but improved selection of brands.

• A change in the store’s layout, which will consist exclusively of mini-boutiques arrayed around a “town square” — a sort of mall within a store. By the end of 2015, every JCPenney store will host 100 or so discrete shops, including Martha Stewart, Izod, Arizona, and Sephora.

• An end to the policy of sales commissions: Previously, sales staff in six departments (such as jewelry and the salon) received commission. On May 8, 2012, that policy was abolished. The reaction among employees in JCPenney stores was described as “stunned,” “fearful” and “funereal.” Additionally, some commission associates were told they were being laid off. Reportedly, JCPenney is also quietly firing middle managers across the country.

Curiously, nowhere in the Fortune account of Johnson’s presentation at Pier 57 is there a mention — not even a hint — of JCPenney’s new gay promotion. On the contrary, Johnson pitched his new vision [Irony Alert!] as a return to the company’s original values. James Cash Penney founded JCPenney in 1902 as a morally upright place of “Fair and Square” and “The Golden Rule.” “Fair and square” is now the tag line for much of the $1 billion JCPenney will spend this year on its new message, with witty, high-profile TV ads, visible during the Oscars and elsewhere.

Penney’s stock had soared following Johnson’s January Pier 57 presentation. But how has the company performed since then?

On Feb. 21, ratings agency Fitch downgraded the company’s debt to junk level, citing worries over the new strategy. More tellingly, here’s JC Penney’s stock performance for the last year. (Click chart to enlarge)

View the full NYSE:JCP chart at Wikinvest

Note that Ron Johnson took over the company’s leadership in November 2011. JCPenney’s stock value rose to its highest in February 2012. Since then, the value systematically declined, with the steepest plunge (so far) in May. JCPenney’s stock value is now LOWER than when Johnson took over the helm!

Alienated by JCPenney’s lesbian Mother’s Day ad, Christian groups in America already vowed they will boycott the store. The latest gay Father’s Day ad will only firm their resolve. All of which leaves the interested observer puzzled as to why Ron Johnson is pursuing this strategy.

Johnson’s biographical profile describes him as married, with two children. But that doesn’t mean much, as countless homosexual men marry and have children. Some eventually “come out”.

In that light, it is fascinating that the Fortune article has this sentence about Ron Johnson’s Pier 57 presentation:

“This is his coming-out party, and he wants it to be perfect.”

Interesting choice of words, don’t you think?

UPDATE (June 24, 2012):

JCPenney is getting rid of its president, Michael Francis, whose position will now be filled by CEO Ron Johnson. This is a step up for Johnson, who I believe is responsible for JCP’s new pandering to homosexuals. Obviously, JCP hasn’t learnt from the steep decline in its stock value under Johnson.
http://www.forbes.com/sites/abrambrown/2012/06/18/j-c-penney-executives-leaves-after-8-months-ceo-johnson-to-take-greater-control/

~Eowyn