Shares of JC Penney are tanking over 11.5% this morning after the retailer reported earnings.
Revenue of $2.9 billion is way below estimates of $3.2 billion.
EPS of $-0.93 per share is well worse than the loss of seven cents that were expected.
And same-store sales are down 26.1%
CEO Ron Johnson offers up:
Ron Johnson, chief executive officer of jcpenney said, “While the quarter overall was challenging, the performance of jcp’s new brands and shops reinforces our conviction to transform jcpenney into a specialty department store. Today, jcp is really a tale of two companies. By far the largest part of our store is the old jcpenney, which continues to struggle and experience significant challenges as evidenced by our third quarter results. However, the new jcp, centered around the shop concept, is gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity which continues to give us confidence in our long term business model.”
When I was in high school in the late 1970’s, we had workshop class as part of the “Industrial Arts” curriculum. It wasn’t quite clear why this was a required credit—we lived in suburb of Washington, D.C., and there were no factories around and most of my friends’ parents were lawyers and government workers. But learning how to use workshop tools—band saws, table saws, drill presses, and the like—was just part of a mid-twentieth-century American education. The bad kids made ninja throwing stars; the worst made bongs. I made a crude magazine stand that my parents tolerated until I left home; I was lucky to have kept all my fingers through the process. Meanwhile, girls were steered to “Home Economics” to learn about sewing, cooking, and painting, which was, in a sense, another form of required crafting and DIY education.
At home, I made Heathkit electronics kits, which involved soldering irons and weeks of painstaking work with wires and components but were the cheapest way to obtain something like a citizen’s band radio or a stereo amplifier. Chemistry kits had actual chemicals in them (as opposed to little more than baking soda and a ream of legalist warnings, as is now sadly the case), and were great fun. Anybody with a cool or temperamental car spent the weekend under the hood with a wrench, hopping it up and otherwise tinkering with its mechanics. “Taking things apart to see how they work” was just what kids did, and finding users for the parts launched countless fantastic machines, some of which actually worked.
But starting in the 1980s and 1990s, the romance of making things with your own hands started to fade. First manufacturing jobs were no longer a safe way to enter and stay in the middle class, and the workshop lost even its vocational appeal as the number of manufacturing workers in the employment rolls shrank. In its place came keyboards and screens. PCs were introduced, and all the good jobs used them; the school curriculum shifted to train kids to become “symbolic analysts,” to use the social-science phrase for white-collar information work. Computer class replaced shop class. School budget cuts in the 1990s were the nail in the coffin; once the generation of workshop teachers retired, they were rarely replaced; the tools were sold or put in storage.
Imported Asian electronics became better and cheaper than Heathkit gear, and the shift from individual electronic components like resistors and transistors and capacitors to inscrutable microchips and integrated circuits made soldering skills pointless. Electronics became disposable boxes with “no user serviceable parts inside,” as the warning labels put it. Heathkit left the kit business in 1992.
Cars evolved from carburetors and distributor caps that you could fiddle with to rule injection and electronic ignition that you couldn’t. Chips replaced mechanical parts. The new cars didn’t need as much maintenance, and even if you wanted to go under the hood there wasn’t much you could fix or modify, other than to change the oil and the oil filter. The working parts were hermetically sealed and locked down, a price we happily paid for reliability and minimal upkeep.
Just as shop class disappeared with school budget cuts, better opportunities in the workplace for women and gender equality killed Home Economics. Kids grew up with computer and video games, not wrenches and band saws. The best minds of a generation were seduced by software and the infinite worlds to be created online, and they made the digital age we all live in today. That is how the world shifted from atoms to bits. The transformation has gone on for thirty years, a generation, and it’s hard to argue with any of it.
But now, thirty years after “Industrial Arts” left the curriculum and large chunks of our manufacturing sectors have shifted overseas, there’s finally a reason to get your hands dirty again. As desktop fabrication tools go mainstream, it’s time to return “making things” to the high school curriculum, not as the shop class of old, but in the form of teaching design.
Today, schoolchildren learn how to use PowerPoint and Excel as part of their computer class, and they still learn to draw and sculpt in art class. But think how much better it would be if they could choose a third option: design class. Imagine a course where kids would learn to use free 3D CAD tools such as Sketchup or Autodesk 123D. Some would design buildings and fantastic structures, much as they sketch in their notebooks already. Others would create elaborate video game levels with landscapes and vehicles. And yet others would invent machines. Even better, imagine if each design classroom had a few 3D printers or a laser cutter. All those desktop design tools have a “Make” menu item. Kids could actually fabricate what they have drawn onscreen. Just consider what it would mean to them to hold something they dreamed up. This is how a generation of Makers will be created. This is how the next wave of manufacturing entrepreneurs will be born.
From the book: MAKERS: The New Industrial Revolution by Chris Anderson. Copyright 2012 by Chris Anderson. Published by arrangement with Crown Business, a division of Random House,
JCPenney CEO and former Apple retail chief Ron Johnson has been constantly criticized for his performance thus far in the turnaround attempt of the ailing retailer, but now, he’s got some very good news.
JCPenney’s new shops inside the department stores are rocking 20 percent higher comps than the rest of the store.
“Shops are working,” said Johnson.
What’s he most impressed with?
The Levi’s shop is his pride and joy — the one with the denim bar. It’s getting double digit comps in mens.
“Both are doing well above what we planned,” said Johnson.
Johnson also focused on Sephora, a shop that JCPenney has actually had for a while now. He says that Sephora continues to comp in year six. In the future, he’s planning on slightly larger Sephora stores. Izod and Liz Claiborne are also doing great, said Johnson.
The in-house jcp brand is a bit more complicated. The women’s shop is doing well, said Johnson, but the mens is behind. He said that the “colors might be a bit advanced,” since JCPenney’s offering a lot of vibrant colors like purple and orange.
Meet the 20 most influential marketing spenders, per Ad Age.
Cravendale has launched its new “cats with thumbs” video (above). We told you it was coming earlier this month.
LIONSGATE HAS PUT ITS $400 MILLION MEDIA ACCOUNT IN REVIEW: The incumbents are Initiative and Mindshare; Horizon will also compete, Ad Age says. “Hunger Games” and “Twilight” are among the titles on the business.
LendingTree picked a new creative shop, Merkley + Partners, and will break its first campaign in the spring. The New York shop beat McK! inney in Durham, N.C., and Anthem Worldwide in San Francisco for the business. Spending is ~$22 million.
MDC Partners’ credit rating was lowered by Standard & Poor’s from B+ to B, with the ratings service saying it expects the holding company’s debt level to remain high over the next 12 to 18 months.
Previously on BI:
- Take Our Instagram Tour Inside The World’s Top Ad Agencies
- Peter Kim Leaves Dachis Group To Join R/GA
- Why Apple Wants To Kill The 2nd Biggest Mobile Ad Business On The Planet
- Here’s That Creepy Rape Fantasy Dress That J. Peterman Is Embarrassed About
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Etsy’s CEO Chad Dickerson recently announced a big company milestone.
Last year, the company’s community generated more than $525 million in sales. This year the community is on track to crush that number.
It’s already passed $500 million in sales.
That figure also gives you an idea of what Etsy is making. Etsy takes a 3.5% cut of every sale and 20 cents for every posted item.
Since February, Etsy’s also started processing payments for some of its shops through a program called Direct Checkout. On payments, it takes a 3% cut plus 25 cents per transaction. Since February, it’s processed $50 million in payments.
That means Etsy has generated more than $20 million this year, and the holiday season hasn’t even struck yet.
On Thursday, it announced a new gift-card program which will require Etsy shop owners to sign up for Direct Checkout, and it’s also offering free payment-processing through the end of September to encourage its use. That may hit transaction fees in the short term, but in the long term, if more Etsy shop owners adopt Direct Checkout, it will substantially increase the money Etsy makes from each sale. (Etsy says Direct Checkout benefits shop owners because customers spend more on average when the feature is enabled.)
Brooklyn-based Etsy has more than 300 employees, 800,000 active merchants and more than 40 million monthly visitors.
BV Capital is relaunching tonight as E.ventures, a network of five connected global funds.
We wouldn’t write about the renaming of a venture-capital firm normally—except that E.ventures has such a rich and fascinating history, one that we covered from its inception in 1998. And we’re taken with the data-driven approach that one of its partners, Tom Gieselmann, is spearheading.
E.ventures began life 14 years ago as Bertelsmann Ventures, a venture-capital arm of the German media company. Jan Henric Buettner, Andreas von Blottnitz, and Gieselmann worked together at AOL Europe, a joint venture of Bertelsmann and AOL; another partner, Mathias Schilling, worked at Bertelsmann as well. They set up shop in the unlikely locale of Santa Barbara, Calif.
In 2000, they took a step towards independence from Bertelsmann and raised a fund as BV Capital. Then things really soured, as Buettner and von Blottnitz sued for a share of the profits from the sale of AOL Europe to AOL. They won hundreds of millions of dollars. (Along the way, BV moved to San Francisco—well ahead of the recent wave of venture capitalists opening up offices in the city.) They had some successes with Onelist, which merged with eGroups and got sold to Yahoo, and GoToMyPC, acquired by Citrix.
The years of the dotcom bust were tough, but they hung in there, raised another fund, and expanded their investments from the US and Europe to Russia, China, and Brazil. Recent hits include Angie’s List and Groupon, which went public last year, and Sonos, where E.ventures sold shares in the company’s most recent financing round. (As part of the deal, longtime BV partner von Blottnitz is leaving the Sonos board, and he’s not joining E.ventures in the firm’s latest incarnation.)
So what’s next?
Over the past two years, Gieselmann told us he’s been working on a dashboard driven by data like Web traffic to spot promising startups.
Like the data he uses, Gieselmann’s dashboard is publicly available. Buettner and Schilling have asked Gieselmann why he doesn’t make the site private, but he argues that the advantage they derive from it isn’t based on the data, which anyone could download and crunch in similar manner, but their analysis.
That data-driven approach, Gieselmann said, takes him and his partners back to their AOL days, when they crunched numbers to figure out the best ways to market dial-up Internet service to European customers.
Sometimes experience pays off.
Digiboo kiosk video service launches, opts for USB drives instead of DVDs originally appeared on Engadget on Mon, 19 Mar 2012 09:42:00 EDT. Please see our terms for use of feeds.
You know how when you shop on Amazon there is a price and a then a “list price” which is usually much higher?
The effect is that you feel like you’re getting a big discount shopping on Amazon.
It turns out Amazon might be publishing list prices that are too high.
Mouse Print first noticed the problem with an array of general consumer products such as Kraft’s Mac & Cheese and a 100-count box of Splenda.
As if this afternoon, most of these prices have been fixed, except for a ton of pet food items.
Take for example the dog treats you see above. The retail value of one Merrick Flossies is approximately $4, making a 50-count supply valued at no more than $200. Yet Amazon claims the list price stands at a whopping $422.89, more than doubled what it should cost.
We tried to contact Amazon for comments, but did not receive a response.
The incident reminds us of last year when Amazon listed a seemingly normal book about flies for $23,698,655.93. Biologist Michael Eisen blogged about the unrealistic selling price, and documented how Amazon’s price for the book The Making of a Fly constantly went up day after another.
Here’s what happened: A professor required this book for a class and students naturally flocked to Amazon to purchase the text. Eventually, only two sellers still had the product available.
Because the book quickly became an exclusive, hot ticket item, Amazon’s algorithm for retailers to competitively price their product catapulted the retail value to more than $23 million.
We’re not sure if this is the same situation with the pet food offerings on the site, but it seems hard to believe the world is running out of doggie treats.
Deli Cat Dry Cat Food
Ok, we know having pets can be expensive but you can’t fool us, Amazon.
Higgins Celestial Blend Bird Food
Who can resist 89 percent off retail list price? Only ten left in stock!
Redbarn Filled Bone – Peanut Butter
Dog foods are getting so fancy these days, but at $6.70, the bone’s a steal.
It’s been a little while since we’ve rolled out a Boutique Call post, but since the category seems somewhat wide open at this point, we’ll let you know that Shaz Sedighzadeh has started up a new operation called The Supply.
Sedighzadeh set up the new shop, which is being dubbed as a “a resource representation entity for digital and creative talent,” following a two-year stint as a digital producer at CP+B, where he helped produce work for Old Navy, Coke Zero and Microsoft Windows. Prior to Crispin, the new entrepreneur spent a few months on the digital production side at Tool of North America.
Want an explanation of what The Supply does? Well, regarding his new operation, here’s a statement from Sedighzadeh, who lives in Denver but shuttles between NY and LA often: “The world of traditional staffing, simply matching keywords on a resume, has been a working model for some time, and may continue to be in some capacity. But in the digital advertising world today, things are shifting way too fast to solely be supported by the standard candidate sourcing methods. Talent specialists and reps now need to think like experienced digital producers and strategists; they need to ‘get it’, knowing what the project/campaign consists of, what type/level of specific talent is needed, matching resources with the timeline/budget, identifying what design aesthetic needs to be applied, whether it’s a job for a vendor or a couple of freelancers, and the list goes on.”
New Career Opportunities Daily: The best jobs in media.
Dr. Augustine Fou is Digital Consigliere to marketing executives, advising them on digital strategy and Unified Marketing(tm). Dr Fou has over 17 years of in-the-trenches, hands-on experience, which enables him to provide objective, in-depth assessments of their current marketing programs and recommendations for improving business impact and ROI using digital insights.
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