J.C. Penney’s Johnson Cleanup Includes Unpaid Contractors
J.C. Penney is still dealing with multiple issues left behind by former C.E.O. Ron Johnson, including litigation that claims construction work orders by the company went unpaid for. The construction work was ordered to create Johnson’s new vision of the shopping experience in J.C. Penney stores, but the vision did not fare very well with consumers.
J.C. Penney has been having cash issues for a long time apparently, as the construction companies allege that J.C. Penney continuously put off payments for work, which in turn raised costs of construction due to delays. At the moment, the costs are still going to be unpaid and add on to the money woes of J.C. Penney. One of the largest issues surrounding the company is how much money it has spent under Ron Johnson. Now, investors are still giving funds, like George Soros, and J.C. Penney also has a $1.75 billion loan commitment from Goldman Sachs. However, given that the company lost $985 million last year, that money may not last for very long if the new C.E.O. can not turn things around.
With these new costs appearing and sales continuing to decrease, I still remain highly pessimistic about the company’s future. Given that the economy statistics recently released were less than stellar, there is even more concern for J.C. Penney if consumer spending as a whole drops. I do not think J.C. Penney will be able to successfully fix its problems for a long time, if ever.