You’ve heard it said before, but it needs to be reiterated…
Brick and mortar retail is dying.
It was a slow death, at first…
But as time goes by, the effects of the digital age are taking their toll and companies are starting to drop like flies – taking their once stellar stocks with them.
One of the former GIANTS of the brick and mortar retail industry is on life support and it seems that the market is reaching for the plug…
What can we learn from this company’s downfall?
And even more…
Is there ANY hope?
Now, I want to go ahead and throw a caveat out there…
I don’t like to showcase stocks that have less than a billion-dollar market cap. I just don’t think that it’s worth the time. However…
We’re going to highlight this company as an example of what can happen if management isn’t careful and doesn’t have their finger on both the pulse of the industry they belong to and the times we’re living in.
Now…
What company are we talking about?
JC Penny (JCP).
When the history books are written in the future – they will probably do a feature on JC Penny and how this once mighty retailer, one of the BIGGEST, in fact, lost its way and ended up going the way of the Dodo.
We all know where it went wrong…
When the dotcom era EXPLODED it was a lot more than the birth of a new industry or the next wave on Wall Street – it was a wake up call for the entire world – the digital age was here and here to stay!
Some companies like Walmart (WMT) and Target (TGT) saw the writing on the wall and shaped their respective business models to incorporate this paradigm shift towards the future…
And then you have companies like JC Penny and their closest competitor, Sears (formerly SHLD), which refused to think that people would ever change their shopping habits and saw no reason to evolve.
We all know Sears’ woes…
And now, since shares of JC Penny have plummeted below $1 – the company is on the cusp of being delisted from the NYSE.
But that’s just part of the problem…
The company has roughly $4 billion in debt coming due in the next few years with $1.5 billion of that debt falling under a revolving credit line…
For a company with a valuation of just about $250 million – that’s not good. Now, while some analysts believe this kind of debt is manageable for now – being delisted would be a HUGE blow to JC Penny and its shareholders.
Now, to JC Penny’s credit, management isn’t giving up the ghost without a fight…
While it would be totally acceptable at this point for management to just let nature take its course – its 0125not doing that – its actively trying to save the company in a last-ditch effort to keep one of the last iconic American brand names alive.
The CEO of the company, Jill Solatu, isn’t letting her company go without trying everything she can to keep it going…
Solatu, who was also the CEO at craft giant, JoAnn’s Fabrics, has been trying out new ideas and business techniques at JC Penny’s “home” store in Plano, Texas before rolling them out across the rest of the stores.
Apparently, Solatu is trying out redesigned dressing rooms staffed with actual stylists, offering classes on home making skills, as well as adding comfortable seating areas for those getting tired of walking around the store.
Look, at this point, anything may help…
If there was ever a time to pull out all the stops – that time is NOW! Solatu and JC Penny can’t put this off any longer – because if they wait any longer and try to just keep status quo – they could find themselves in the EXACT same situation as their now bankrupt competitor, Sears…
And FAST.
It’s a cautionary tale for ANY company in any industry…
And that tale is this: don’t get too comfortable. Things change. And if you don’t change with it – you could find yourself in a WORLD of trouble.
The funny thing is…
That’s one of the reasons why GorillaTrades exists in the first place. Things were changing and some of the more established stock pickers at the time didn’t understand that we were moving in a different direction.
These guys were OLD school…
Still sending out printed newsletters with stock recommendations on them when it was obvious that the old way of doing things just wasn’t going to cut the mustard.
Most of them are gone now…
But GorillaTrades is still here 20 years later and going STRONG. We’ve given our subscribers some unbelievable opportunities to make a LOT of money and will continue to do so because we understand what it takes to create wealth in today’s digital age.
We’d love to tell you how to do it all – but it’s easier if we show you – so please, consider becoming a GorillaTrades subscriber today.
You don’t want your finances to go the way of the Dodo…
And neither do I!
“Libraries are as the shrine where all the relics of the ancient saints, full of true virtue, and that without delusion or imposture, are preserved and reposed.” ― Francis Bacon