The Outcomes
The results published in February 2012 were poor. Revenues had fallen by $4.3 billion, making a $1 billion loss. The stock fell to $18, and Standard & Poor’s cut JCP’s debt rating to CCC+ (a long way from “triple A”). In April 2012, JCP laid off 13 percent of its office staff in Texas, closed one of its call centers, and also “retired” many managers, supervisors, and long-serving employees on the grounds that new working practices required less oversight. In May 2012, store sales were down 20 percent compared with the previous year. Johnson had projected a short-term drop in sales, but not by that much. He commented that, “I’m completely convinced that our transformation is on track,” leading to a 5.9 percent rise in the stock. In July 2012, a further 350 headquarters staff were laid off. By October 2012, online sales were almost 40 percent down over the year. It was estimated that the decision to separate the two buying groups had cost JCP around $500 million.
