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There was one more post-holiday markdown at JCPenney yesterday: its shares.
The flailing department store’s stock opened down about 8 percent after a Wall Street analyst recommended investors sell their holdings — although it recovered a bit in the afternoon to close down 4.7 percent, at $18.26.
Penney’s sales at stores open at least a year plummeted more than 30 percent through most of the crucial holiday season, sources close to the company told The Post this week.
That’s even worse than the already-disastrous 26-percent same-store sales drop Penney posted in the third quarter, as shoppers balked at CEO Ron Johnson’s controversial everyday low pricing strategy.
Johnson — a former Apple exec who has cast himself as a retail revolutionary as he radically overhauls the aging retailer — backtracked on a no-discounting policy he imposed nearly a year ago as the holidays kicked off with Black Friday sales.
By Dec. 31, Penney was widely advertising markdowns of 20 to 30 percent as it scrambled to clear unsold shirts, sweaters and jeans.
At an industry conference this week sponsored by Women’s Wear Daily, Johnson admitted that winning over shoppers with his new vision “has been a bigger challenge than I anticipated,” the paper reported.
Still, Johnson remains upbeat on his turnaround plan, which is slated for completion by 2015.
The CEO, who previously ran Apple’s sleek retail chain, vowed to make Penney’s aging stores “a happening place” by introducing hot fashion brands such as Betsey Johnson, Nanette Lepore and Marchesa.
Nevertheless, Penney is still struggling to clear excess inventory. Yesterday, the retailer’s website advertised discounts of 30 to 50 percent off “thousands of items.”
“There was a slight recovery during the second half of December, so (Penney’s same-store sales) might be down in the high-20s overall,” according to one insider briefed on Penney’s holiday sales.
Citing continued discounting, UBS analyst Michael Binetti said yesterday he now expects Penney’s fourth-quarter same-store sales to plunge 28 percent versus his previous forecast for a 20-percent drop.
As business nosedives, it’s looking doubtful that Penney will make good on its November forecast to generate $1 billion in cash for the fiscal year, Binetti said.
That, in turn, could jeopardize Johnson’s capital-intensive plan to open dozens of in-store shops this year for a slew of brands he’s luring to the chain, including Martha Stewart, home designer Jonathan Adler and fashion label Joe Fresh.
“We believe JCP may have to slow the rollout of new high-productivity shops,” Binetti wrote, slashing his price target on the shares to $13 from $21.