J.C. Penney Co. Inc. investors — already an ornery bunch — were uninspired by the return of Myron “Mike” Ullman 3rd as chief executive officer.
Shares of Penney’s fell 12.2 percent to $13.93 Tuesday, leaving the department store with a market capitalization of $3.06 billion. The stock price had already been cut in half during the 17-month tenure of former ceo Ron Johnson, which abruptly ended Monday.
Wall Street analysts said Ullman’s relationships with vendors and understanding of Penney’s from his nearly seven years at the helm, before Johnson succeeded him, would help him stabilize the business.
But there’s some serious work to be done and it remains to be seen how long Ullman, who has no employment contract, will stay around and how much of Johnson’s strategy he will retain if he does.
Citi analyst Deborah Weinswig said Ullman would work to bring back department store talent to the organization, stabilize sales as well as worker morale, invigorate the Internet business and look to conserve capital.
“The big question that remains is: How long will it take to fix the business and how much will it cost?” Weinswig said. “Any course-correcting strategy will likely be tackled in pieces and over a period of several quarters. We think pricing and promotions will be the first areas to be fixed, and we expect a return to a high-low promotional strategy and stepped up advertising.”
Deutsche Bank analyst Paul Trussell said Ullman would “look to quickly assess what is salvageable over the next six [to] 12 months and make a recommendation to the board on the next ceo or for an alternative strategic option — via real estate or outright sale.”
Trussell said concerns over the company’s access to cash, or liquidity, would now take center stage given its recent losses and expenditures to remodel stores.
Kimberly Greenberger, a Morgan Stanley analyst, also said investors would probably continue to worry over the state of Penney’s balance sheet, but that Ullman’s return was a positive step.
Even so, Greenberger said the chain faces steep challenges.
“[Penney’s] struggles to drive sales with a concentration of private label brands with little to no meaning in today’s market,” she said. “We are convinced [Penney’s] needs a compelling way forward — but what that is remains to be seen. Johnson’s path of aspiring to a new shopper did not work, but [Penney’s] struggled to stabilize sales before Johnson’s arrival.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast