A couple of stories this morning concerning troubled JC Penney:
• Reuters reports that a New York appeals court judge has temporarily blocked JC Penney from selling products designed by Martha Stewart Omnimedia, but not branded with the style doyenne's name. The reason: Macy's is appealing another judge's ruling that JC Penney can sell the goods without violating Stewart's contract with Macy's.
The appeals court judge is expected to make a decision tomorrow about whether to extend the block.
• The New York Times has a piece noting that returning CEOMyron E. Ullman III has decided to borrow $850 million from a line of credit available to the company. Added to $900 million in cash that JC Penney has on hand, and a possible investment that the company could take from other sources, the goal is to shore up the chain's finances in order to reassure vendors that they will be paid for shipped merchandise.
At the same time, there have been reports that JCP plans no layoffs and no store closings - that the goal is to build the existing business and try to grow sales rather than cut its way to prosperity.
• Reuters reports that a New York appeals court judge has temporarily blocked JC Penney from selling products designed by Martha Stewart Omnimedia, but not branded with the style doyenne's name. The reason: Macy's is appealing another judge's ruling that JC Penney can sell the goods without violating Stewart's contract with Macy's.
The appeals court judge is expected to make a decision tomorrow about whether to extend the block.
• The New York Times has a piece noting that returning CEOMyron E. Ullman III has decided to borrow $850 million from a line of credit available to the company. Added to $900 million in cash that JC Penney has on hand, and a possible investment that the company could take from other sources, the goal is to shore up the chain's finances in order to reassure vendors that they will be paid for shipped merchandise.
At the same time, there have been reports that JCP plans no layoffs and no store closings - that the goal is to build the existing business and try to grow sales rather than cut its way to prosperity.
- KC's View:
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I like the idea that JCP seems to realize that just cutting isn't the way to go, that it has to invest in people, stores and products to build traffic and sales.
That said, JCP can't just replay the same sold story ... it has to find ways to change the paradigm and make its business model relevant.
