Myron “Mike” Ullman 3rd is taking pages from his old playbook in what will be a tough year ahead to revive J. C. Penney.
Ullman got at least some good news late last week when investor George Soros took a 7.9 percent stake in the retailer and Goldman Sachs reportedly lined up $1.75 billion in real estate and asset-backed financing to stabilize operations and sustain upgrades, potentially giving the Penney’s chief executive some breathing room.
The ceo has already set about reversing much of what was initiated by his predecessor, Ron Johnson, by:
• Slowing down the aggressive and costly shop rollout;
• Reviving private brands that were downsized;
• Cutting back on the tighter, contemporary fits in apparel in favor of a more classic, traditional balance for customers over 35;
• Bringing back big one-day sales and steeper markdowns and value deals while reducing everyday low pricing.
On hold are some major shop rollouts, with sources seeing delays on the Disney, Carters and Giggle shops for kids — deals that were unveiled months ago and might have to be renegotiated, potentially pushing the revamp of the kids’ floor to 2014, according to sources. The deals were contingent on creating shops which the now cash-strapped Penney’s might not want to proceed with. The retailer is expected to burn through more than $1 billion in the first quarter to catch up on vendor payments and pay for home shops that are being built, according to analysts’ estimates.
Last September, Penney’s said it would open Disney children’s boutiques in at least 520 stores in fall 2013, with products designed exclusively for the chain, unlike the mass-distributed licensed goods sold elsewhere. Costumes, plush toys, figurines, footwear, sleepwear, underwear, backpacks, lunch totes and apparel for boys, girls and babies were on the agenda. Carter’s and Giggle shops were revealed earlier. It’s not clear whether Penney’s could carry the goods without building the shops. Penney’s had no update on the situation. Previously, a few women’s shops were delayed to focus on the home floor, which is being reintroduced next month. Carter’s had no comment on Penney’s; Disney and Giggle officials couldn’t be reached.
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