J.C. Penney’s Numbers-Free Sales Update Viewed As Bad News

Sometimes, no news is good news. But not when it comes to reports on how your company is faring, J.C. Penney learned today.

The troubled retailer, which started issuing monthly performance updates in October as it works to repair its business, limited today’s holiday sales release to just three sentences without providing any data points. J.C. Penney said it’s “pleased with its performance for the holiday period, showing continued progress in its turnaround efforts,” and reiterated the fourth-quarter outlook it gave in November.

Analysts were swift to jump on the lack of information in the release, which was incredibly sparse compared with the company’s past two reports.

Sterne Agee analyst Chuck Grom sent out a note to investors titled “Things That Make You Go Hmmmm,” writing that “the length of JCP’s Holiday update tells you everything you need to know about the company’s performance during the 5-week December period.” In the previous two monthly statements, the retailer provided same-store sales numbers, commentary on online sales, and customer conversion details, he wrote.

“This leads us to believe that if JCP had good things to say about business trends, the company would have shared more – consistent with how the team shared information in the past,” he said in the note.

Rick Snyder of Maxim Group, in a note to investors titled “Say, What?” said the release was “remarkable for being unremarkable.”

“This morning, J. C. Penney released a terse sales release that was light on details,” he wrote. “In fact, there were no details whatsoever. According to the release, the company is ‘pleased’ with its holiday performance. We have learned that often what is not said is more important than what is said.”

“We would have found the press release much more useful if it actually quantified December sales,” he wrote.

In October, Chief Executive Officer Mike Ullman said the releases were part of an effort to be more transparent about the turnaround.

“It’s important given all the information that’s out there in the market to give a straight story about where we are,” he said at a Women’s Wear Daily conference.

Grom, Snyder, and J.P. Morgan’s Matthew Boss are anticipating single-digit increases in same-store sales for the fourth quarter, which ends on Jan. 31. That would represent a small improvement after a 32% plunge in the same period last year.

It’s been a tough holiday season for all retailers, which have been discounting heavily to lure customers to stores.

J.C. Penney’s shares fell more than 8% to around $7.50 a share today. The stock plummeted 54% last year. It was the worst performer in the S&P 500, from which the retailer was removed in late November based on its falling market value.

Read more: http://buzzfeed.com/sapna/jc-penneys-numbers-free-sales-update-viewed-as-bad-news

Exclusive: Therapist Enlisted To Help J.C. Penney Employees Cope Compares Retailer’s Past 17 Months To 9/11

After more than a year of management and financial upheaval, J.C. Penney executives last month asked a therapist to address employees at an internal meeting. He ended up traumatizing them more.

According to sources with knowledge of the situation, J.C. Penney chief merchant Liz Sweney brought in an organizational therapist to help employees cope with the firing of former CEO Ron Johnson in April and a disastrous year that saw revenue plummet $4.3 billion, or 25%. The pair proceeded to compare the experience to a bomb explosion and the 9/11 terrorist attacks.

The presentation was “offensive” to a number of employees, one source said, noting that the bomb analogy came just weeks after the Boston Marathon bombing.

A representative for J.C. Penney declined to comment.

The therapy session was part of a standard monthly meeting in May with J.C. Penney’s merchandising division, sources said. Hundreds of employees attended the meeting either in person or via closed-circuit televisions.

In an address to her team, Sweney likened the past 17 months under Johnson to the detonation of a bomb. After Sweney’s talk, the organizational therapist began his presentation by asking employees to turn to each other and change three things about themselves — remove an earring, for instance, or put their hair up in a ponytail — as a means to discuss shifts and recognition.

The next part, however, left employees speechless.

According to the sources, the therapist proceeded to screen Boatlift, a 12-minute video narrated by Tom Hanks about the evacuation of half a million people from the devastated piers of Lower Manhattan after 9/11 — the largest sea evacuation in history — as a parallel to life after Johnson. The video, which describes how regular Americans helped ferry victims to safety after the worst terrorist attack on U.S. soil, supposedly meant to illustrate how J.C. Penney employees also need to be “captains” in the post-Johnson era and pursue the right courses of action without waiting for directions.

J.C. Penney is working to rebuild both its business and its image after Johnson, the ex-Apple retail chief, alienated customers with an attempted overhaul of the company. He was replaced with his predecessor, Mike Ullman, in April. Last month, J.C. Penney aired commercials apologizing to customers and thanking them for returning.

Some organizational therapists are brought in right after the initial trauma of a major management change to “salve survival guilt,” said Mark Federman, academic vice president and dean of leadership and organization at the Adler Graduate Professional School in Toronto, Canada. Other times they are brought in later if there is “considerable resistance” to an incoming culture or to help employees learn new routines, vocabulary, and behavior, Federman said.

“Most of my clients are very, shall we say, circumspect, about needing my services,” Federman said in an e-mail, declining to name which corporations he has worked for. “Woody Allen made it fashionable for individuals to seek therapy, and Eric Schmidt of Google made it fashionable for CEOs to have executive coaches. However, the need for organizational therapists is still very much in the closet.”

Boatlift, Narrated by Tom Hanks

This video about 9/11 was used by an organizational therapist at an internal J.C. Penney meeting as a parallel to the company’s management change in April. youtube.com

Read more: http://buzzfeed.com/sapna/exclusive-jc-penney-leaders-liken-former-ceo-tenure-to-bomb

China Loves Talking About Bitcoin

The majority of Bitcoin exchanges happen in China’s currency, the yuan, but no one’s quite sure why.

One theory is that people see it as a way to evade the country’s rules restricting money flowing out of the country. But it may be simpler than that — Bitcoin might be popular in China simply because everyone’s talking about it.

Jerry Brito, a scholar at the Mercatus Institute, said that it might have started with a CCTV documentary on Bitcoin that aired all over the country. In the U.S., this is a common pattern: The media reports on Bitcoin, either its usefulness in black-market transactions or its skyrocketing price, people become more interested in it, buy some, the price goes up. Rinse and repeat.

Bitcoin fever is China is so strong, there’s even a magazine called BTCMAN. And Chinese social media, especially the Twitter-like service Weibo, is positively lousy with everyone’s opinion on the digital cryptocurrency.

Weibo/Kevin Tang
Weibo/Kevin Tang
Weibo/Kevin Tang
Weibo/Kevin Tang
Weibo/Kevin Tang
Weibo/Kevin Tang

9. Bitcoin has even spawned its own publications, like those that have popped up in the U.S.

BTCMan

China’s embrace of Bitcion hit a hurdle when the county’s central bank, the People’s Bank of China, said Thursday that banks and other financial institutions could not trade in the digital currency.

The price of Bitcoin on BTC China, the largest Bitcoin exchange in China and the world, was hovering at right below 7,000 yuan, or about $1,150 before the announcement, and then immediately crashed to 5,500 yuan, or about $910, before recovering to 6,150, or $1,010. The price bounced around again today, with reports that a music service operated by Baidu, the Chinese search engine, would no longer accept Bitcoin because of the volatility in price. It’s now at 5,527 yuan, or $908.

11. And with the central bank coming out with restrictions on Bitcoin, China’s libertarians had a totally measured reaction.

Weibo/Kevin Tang

What the PBOC’s new rules don’t do is particularly interfere with individual trading in Bitcoin, converting renminbi to Bitcoin or the other way around, among individuals. It’s this activity in Bitcoin exchanges that has driven Bitcion’s remarkable rise in China, including the price of Bitcoin in renminbi having a premium over its price in dollars.

In a research note released before the new Chinese rules were announced, a team of Bank of America Merrill Lynch economists wrote, “China has also seen a sharp increase in Bitcoin activity and now accounts for a majority of transactions when broken down by currency.”

Bank of America Merrill Lynch / Via s3.amazonaws.com

Read more: http://buzzfeed.com/matthewzeitlin/chinas-central-bank-restricts-bitcoin-but-the-country-still

How To Get Tossed Out Of Twitter’s Roadshow

Kacper Pempel / Reuters

Twitter’s IPO roadshow pulled into New York’s posh Mandarin Oriental for a lunchtime presentation to a group of investors Wednesday — and the media was distinctly unwelcome.

By 9 a.m., representatives of Twitter — otherwise the media’s favorite social network — and hotel security were already on the lookout for journalists trying to crash the party, hoping to avoid the mass hysteria that surrounded Facebook’s IPO roadshow, where hoodie-wearing Chief Executive Mark Zuckerberg was greeted by throngs of bystanders and fans on his way into Manhattan’s Sheraton Hotel for a similar presentation.

While television crews and photographers began gathering early in the morning for Zuckerberg’s presentation, a lone CNBC truck parked at the curb was the only indication that something business-related was happening at the hotel this morning.

One hotel employee told BuzzFeed that Twitter executives and the company’s bankers planned to be at the Mandarin until 5 p.m. And though this employee said some attendees had already arrived, the 36th floor where the presentation was supposed to take place was still and empty. A coffee bar sat undisturbed. The only clue that anything was going on were printed signs telling A–M to go left and N–Z to go right.

We weren’t on the 36th floor for long, however. A blonde woman sitting behind a desk with a laptop spotted us and, after we informed her that we were there for the roadshow, demanded that we leave immediately.

“You can’t be here!” she shouted while calling for security.

Security arrived and, along with the Twitter representative, escorted us to the elevator, where two much larger members of the hotel’s security staff appeared to assist with our ejection.

Later on, as the lunchtime presentation drew nearer and the crowd swelled, the security increased proportionally. No fewer than five security guards worked the lobby — three at the door, one in front of the elevator, and one in front of the hall leading to the fitness center. A gaggle of reporters from other outlets — The Wall Street Journal, Bloomberg, Reuters — sat around in comfortable-looking chairs.

A steady stream of attendees began to flow around noon, some with name tags featuring Twitter’s signature bird logo. They were directed to a sign-in table, where they had to provide a business card and show a photo ID that matched with the picture on a corresponding file. Upon admittance, each investor was given a prospectus.

By 12:35 p.m, the guests were seated at round tables. The doors closed at around 12:45 p.m. and security began turning people away, saying registration was closed.

The whole thing was over less than an hour later. Attendees dined on chicken and drank iced tea or coffee while Twitter CEO Dick Costolo and Chief Financial Officer Mike Gupta made their pitch, a source said. The source, who spoke to BuzzFeed before exiting, said the pitch lasted about 30 minutes.

After the luncheon presentation, dozens of bankers left the Mandarin and made beelines away from the reporters outside, saying “no comment” and “I can’t talk about it,” or just crossing the street when approached by BuzzFeed.

From here, Twitter executives will conduct similar presentations in Boston, Chicago, San Francisco, Los Angeles, and Denver before returning to New York next week. The company priced its shares between $17 and $20 and plans to sell at least 70 million shares, which would raise about $1.6 billion in the IPO and equate to a total value of around $11 billion for the company. Twitter shares are expected to begin trading on the New York Stock Exchange under the ticker symbol “TWTR” on Nov. 6.

Twitter file given to attendees of its roadshow presentation in New York on Wednesday. Matt Lynley

The lone CNBC truck outside Twitter’s IPO roadshow presentation in New York Wednesday. Matt Zeitlin

Read more: http://buzzfeed.com/mariahsummers/how-to-get-tossed-out-of-twitters-road-show

In this linguistic map, the London tube becomes a window into ethnic diversity

In this linguistic map, the London tube becomes a window into ethnic diversity

This map, created by Oliver O’Brien of University College London’s Department of Geography, shows London’s extraordinary ethnic diversity. O’Brien has mapped the London subway system with labels indicating the second-most commonly spoken language after English among people who live nearby. The size of the circle is proportional to the percentage of people in the neighborhood that speak the language.

The map hints at London’s large South Asian population, whose native languages include Bengali, Tamil, Urdu, Gujarati and Panjabi. Turkish, Lithuanian, Arabic and French-speaking neighborhoods are also in evidence. To see the map in more detail, click here.

About one-third of London’s roughly 8 million residents are foreign born, according to the Office for National Statistics. The 2011 Census showed that Indians are the largest group of foreign-born inhabitants in London, followed by those born in Poland, Ireland, Nigeria, Pakistan, Bangladesh and Jamaica.

Read more: http://knowmore.washingtonpost.com/2014/10/27/in-this-linguistic-map-the-london-tube-becomes-a-window-into-ethnic-diversity/

Jon Stewart Sends One Book’s Sales Surging On Amazon

The Daily Show’s Jon Stewart spent a lot of time talking about the book The Reason I Jump, a memoir by an autistic boy, on air last night, calling it “one of the most remarkable books” he’s ever read.

Naturally, that brought the title a whole lot of visibility and, with that, a big bump to its sales on Amazon.

The book today is now the number-two best-selling title on Amazon right now, and is listed as number three on the site’s “movers and shakers” section, which is updated hourly. Yesterday, the book was ranked 556 for sales.

You can see the interview below.

Read more: http://buzzfeed.com/mattlynley/jon-stewart-sends-one-books-sales-surging-on-amazon

There Sure Were A Lot Of Stock Downgrades Last Quarter

Lucas Jackson / Reuters

The number of Fortune 100 companies that experienced net downgrades from analysts nearly doubled those that received net upgrades over the last 90 days. That’s according to data from StarMine compiled by Thompson One Analytics showing that while there were 21 companies receiving net upgrades from analysts in the last 90 days, there were 39 companies whose stock analysts felt would lose value in the months to come due to various market factors.

So just what might those factors be? Firstly, momentum often leads analysts to believe a peak has been reached and a stock will likely turn the corner downward in the months ahead. The stock price history isn’t the only cause for a downgrade; analysts also take into account sector- and company-specific data and trends that could affect the direction a stock will take.

As for the recently downgraded list, industries represented are as varied as technology, finance, entertainment, and construction (full list below). In a few cases, the downgrades come as little surprise.

Construction giant Caterpillar’s downgrade comes on the heels of comments from that hedge fund titan Jim Chanos made at CNBC’s Delivering Alpha Conference last month that he was shorting the stock, citing a lack of financial flexibility.

And in the case of powerhouse stock Amazon, the company experienced a rise in share price in the face of a recent earnings miss, which may have given analysts a cause for concern, though CEO Jeff Bezos doesn’t really seem to care all that much.

Disney’s stock experienced something similar after the company’s release of The Lone Ranger flopped tremendously on its opening weekend. Though shares were trading up by about 1% the Monday morning following the weekend, it’s been mostly downhill ever since.

Net Upgrades of the Last 90 Days

Spencer Platt / Getty Images

AAPL Apple Inc
ADM Archer Daniels Midland Co
ALL Allstate Corporation
BG Bunge Limited
BHI Baker Hughes Incorporated
CMCSA Comcast Corp
CSCO Cisco Sys Inc
DAL Delta Air Lines Inc
FOX AU Twenty-First Century Fox Inc
HES Hess Corp
HPQ Hewlett Packard Co
IM Ingram Micro
JCI Johnson Ctls Inc
LMT Lockheed Martin Corporation
LYB Lyondellbasell Industries Nv
PSX Phillips 66
SLB Schlumberger Ltd
T AT&T Inc
TSN Tyson Foods Inc
UAL United Continental Holdings Inc
WMT Wal-Mart Stores Inc

Net Downgrades

Bloomberg / Getty Images

ABC AmerisourceBergen Corp
ACN Accenture Plc
AET Aetna Incorporated
AMZN Amazon.Com Inc.
AXP American Express Company
BAC Bank Of America Corp
CAT Caterpillar Incorporated
CI CIGNA Corporation
CVX Chevron Corp
DD EI Du Pont De Nemours & Co
DE Deere & Company
DIS Walt Disney Company
FDX FedEx Corp
FOXA Twenty-First Century Fox Inc
GOOG Google Inc
HON Honeywell International
HUM Humana Inc
IBM International Business Machines
INT World Fuel Services Corporation
INTC Intel Corporation
JNJ Johnson & Johnson
KR Kroger Co/The
MCK McKesson Corp
MMM 3M Co
MPC Marathon Petroleum Corp
MSFT Microsoft Corp
ORCL Oracle Corporation
PAA Plains All American Pipeline Lp
PFE Pfizer Inc
PRU Prudential Financial Inc
SWY Safeway Inc
TGT Target Corporation
UNH UnitedHealth Group Inc
UPS United Parcel Service-Cl B
UTX United Technologies Cp
VLO Valero Energy Corporation
WAG Walgreen Co
WFC Wells Fargo & Co
WLP Wellpoint Inc

Read more: http://buzzfeed.com/mariahsummers/there-sure-were-a-lot-of-stock-downgrades-last-quarter

The Media Has Already Lost Interest In Twitter

Here’s another snapshot of how much mindshare Twitter has in its post-IPO era with respect to Facebook, courtesy of Bloomberg: the number of news reports about Twitter has, since going public, fallen sharply.

Bloomberg is able to assess how many news stories across a variety of outlets (Bloomberg says it is more than 100 authoritative sources) were published about Twitter — and other companies — with its data, as can be seen in the chart below. As expected, the number of stories about Twitter (the white line) has fallen sharply since it went public, but for the tech story of 2013 it’s completely dwarfed by Facebook.

Even going back as far as nearly a year before Facebook’s initial public offering, Twitter has many fewer mentions than Facebook. That makes sense, given that Facebook is (and was) a much larger company with many more users, but it is still rather telling.

Twitter, at its peak, was mentioned in 591 stories weekly, whereas Facebook was mentioned more than 1,300 times in a week during its peak (also when it went public).

This snapshot is from June 27, 2011, to today, November 18.

It’s also worth noting, however, that much of the press following Facebook’s initial public offering was negative — the first-day trading glitches, selective discussions with banks, and such — while Twitter’s IPO was quiet and went through without much fanfare (though the stock did nearly double in its first day of trading).

Read more: http://buzzfeed.com/mattlynley/the-media-has-already-lost-interest-in-twitter

These Five J.Crew Executives Just Made A Boatload Of Money

J.Crew creative director Jenna Lyons. Chelsea Lauren / Getty Images

The holidays came early for five J.Crew executives, including creative director Jenna Lyons and Chief Operating Officer James Scully.

The company, which sold $500 million of debt last week to fund a payout to the private equity companies that own it, also paid some of that money to top executives, who rolled over vested stock options in J.Crew as part of its buyout in March 2011.

Lyons got $1.9 million and Scully got $1.2 million, according to a filing today. Libby Wadle, president of the J.Crew brand, got $949,426; Lynda Markoe, executive vice president of human resources, received $474,713; and Stuart Haselden, chief financial officer, got $103,487. That would suggest Lyons and Scully have the most shares.

J.Crew said it’s making the “dividend equivalent payments” instead of reducing the exercise price of the executives’ rollover stock options. Chief Executive Officer Mickey Drexler isn’t receiving such a payout because he doesn’t hold such options, according to the filing. Drexler entered a different agreement when the buyout occurred.

The figures are large compared to the annual salaries of the executives. Lyons, for example, most recently made $1.8 million while Scully and Wadle made $1.2 million and $1.1 million, filings show.

TPG Capital and Leonard Green & Partners, which took J.Crew private a little more than two years ago for $3 billion, received the bulk of the proceeds from the dividend deal.

Read more: http://buzzfeed.com/sapna/these-five-jcrew-executives-just-made-a-boatload-of-money

Private Equity Sinks Teeth Into Casual Dining Deals

Private equity executives are more apt to dine at Daniel or Per Se than T.G.I. Friday’s or P.F. Chang’s. But lately they have been feasting on acquisitions of traditionally middle-market, suburban, value chain restaurants and so-called quick service restaurants (QSRs), like Chipotle and Chop’t, as consumer spending on food consumed outside of the home has reached record highs.

U.S. consumers now spend a record-high 85.4 cents on food and beverages consumed outside of the home for every dollar they spend at the supermarket, according to a May research note by Andrew Wilkinson of Miller Tabak. This signals that, despite payroll tax increases, U.S. consumers are more willing to spend their disposable income dining out at restaurants. In other words, instead of baking a cake at home, families are now celebrating birthdays at Chili’s — literally.

Shares of Brinker, the parent company of Chili’s and other chains, started the year at around $30 and have steadily climbed to about $40 over the last five months. Shares of Darden, which owns chains like Red Lobster and Olive Garden, have followed a similarly consistent trajectory, going from around $44 in January to more than $52 in recent days.

The value restaurant chain and franchise sector has typically been ridiculed for performing weakly in poor economic times. However, the relative success of these chains lately, coupled with the increase in consumer spending on dining out, suggests that investment thesis might be past its expiration date.

“There definitely was a dark period where dining out was replaced by food prepared in the home, but we are seeing a change in that,” said Daniel Bonoff, partner at New York–based private equity firm Goode Partners, whose portfolio includes Rosa Mexicano and Chuy’s restaurants. “We believe the restaurant sector is a great place to be making money right now. There’s also been sort of a Darwinian survival of the fittest where really new concepts are emerging on the scene and growing really rapidly.”

New concepts getting noticed by private equity firms include more ethnic food chains and value restaurants. Centerbridge and Angelo Gordon last year bought P.F. Chang’s and Benihana, respectively.

For his part, Bonoff says Chuy’s has turned out to be one of Goode Partners’ best investments. It took the Tex-Mex chain, which has locations throughout the South and is reminiscent of the national brand Chevy’s, public last summer at $13 a share. Just this week its stock reached more than $32.50. The chain has the secret sauce that private equity wants in restaurant deals right now: quick service with an ethnic component.

Bonoff said the most desired chain plays in the private equity market are “places that are trying to be the next Chipotle.”

“Mediterranean, Asian — a lot of that serves the purpose of getting high-quality, healthier foods than your greasy burger, but also doing it in an efficient way,” Bonoff said. “It’s not just people eating out there for dinner, but you can get a lunch day part as well.”

The hot market is creating fierce competition for deals among “strategic acquirers,” companies like Brinker and Darden. On Wednesday, for instance, Houston-based private hospitality company Landry’s Restaurants bought the steak and seafood chain Mastro’s.

Some have actually started to call a bubble given how rich deals are being valued at and how fast they are happening.

“Restaurant investing is one of the most cyclical segments in private equity, and in the time frame where the world is very dark, there were very few firms actively looking in the restaurant sector,” Bonoff said. “Now it’s happened very quickly. Money has flown in. Some might say this is a sign of a bubble in restaurants across the board.”

Read more: http://buzzfeed.com/mariahsummers/private-equity-sinks-teeth-into-casual-dining-deals