Stop the Bleeding At JCP: Fire Ron Johnson
At about $22.90 (and long before), I urged investors to "Sell His Stock Now."
With JCP set to languish in the teens, Ron Johnson should become one of 2013's first-fired CEOs. The company needs a visionary who can abandon the long-failed department store concept and come up with something that's actually different.
J.C. Penney must disband and regroup, morphing into an organism completely unrecognizable to itself and its customers. Like an oldies radio station ditching the format for hard rock, it will scare away much of its remaining base; however, it has no choice. The same old retail toolbag Johnson continues to pull from hasn't worked for longer than awhile.
At some level, Johnson has something in common with Apple's (AAPL) most ardent bulls.
I'm talking about the people who ripped me all year long for warning about Apple's prospects without Steve Jobs. Suddenly, the Can Apple maintain its magic w/o Jobs? storyline leads almost every media headline and analyst commentary.
For more than a year, AAPL bulls, desperately not wanting the dream to die, blew off the realities a Steve Jobs-less, Tim Cook-led Apple faces. They wanted it both ways. However, over the long term (I still believe in AAPL the stock over the next 3-6 months minimum), they can't have it both ways. It's too complicated for such psychologically comfortable simplicity.
The same type of dynamic doomed Johnson at J.C. Penney from the beginning.
When JCP hired him, the move duped me just like everybody else. But then I saw Johnson speak (via JCP investor relations) shortly after getting the gig at a big analyst powwow in New York.