Good Bye Ron, Welcome Back Myron, but What About Joe?

Loblaw shareholders will be particularly interested in hearing the strategic direction that JC Penney’s returning CEO has planned.

| More on:
The Motley Fool
You’re reading a free article with opinions that may differ from The Motley Fool’s premium investing services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn more

Ron Johnson is out as CEO of JC Penney (NYSE:JCP) and the man he replaced is in.  This is a story you’re going to hear a lot of today.  One of the read throughs from this personnel shift at the U.S. retailer is the potential impact it could have on Canada’s largest food retailer, Loblaw (TSX:L).  Perhaps David Einhorn knew something that we didn’t know when he indicated he had taken a hypothetical short position against Loblaw in a charity stock picking competition?

Loblaw owns Joe Fresh, the cheap-chic clothing retailer that signed a deal to be a part of Johnson’s strategy to transform JC Penney stores into a mall-within-a-mall.  In my mind, this deal to open 700 Joe Fresh outlets in one shot, across the U.S., with very little cap ex seemed like a good one for Loblaw as a way to generate some much-needed growth.  However, when the 4-year agreement was made public last July, Loblaw’s stock didn’t budge.  And in March when 681 Joe Fresh stores opened in JC Penney’s across the country, right on schedule?  Not even a flinch out of Loblaw’s stock.

Foolish Takeaway

The return of Ullman to the role of CEO brings a high level of uncertainty to JC Penney’s future strategy.  Does Ullman stick to what Johnson was trying to do?  Is there a hybrid version of the same strategy? Does he go back to his old ways?  Does he try something completely different?  At this point we don’t know.  What we do know is that JC Penney’s stock is going to have an interesting day.  Given past reactions, this should be a non-event for Loblaw’s shareholders, but we’ll see if all of a sudden Mr. Market takes an interest in this angle as well.

Canadian investors deserve to own great businesses and the U.S. market is home to some of the best in the world.  We have created a special report that identifies 3 U.S. businesses that are far less prone to JC Penney-esque hiccups and worthy of your hard-earned investment dollars.  Simply click here to receive “3 U.S. Stocks Every Canadian Should Own” – FREE!

Follow us on Twitter and Facebook for the latest in Foolish investing.

Fool contributor Iain Butler reluctantly admits to owning a few shares of JC Penney.  The Motley Fool has no positions in the stocks mentioned above.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

More on Investing

funds, money, nest egg
Dividend Stocks

TFSA Passive Income: 2 Great Canadian Dividend Stocks for Retirees to Buy Now

Retirees seeking reliable passive income can now buy top TSX dividend stocks at cheap prices.

Read more »

man window buildings
Stocks for Beginners

Foolish Beginners: 1 Stock Pick to Buy Now for a $6,000 TFSA

Brookfield Asset Management (TSX:BAM.A)(NYSE:BAM) stock looks cheap as shares regain their footing.

Read more »

data analyze research
Dividend Stocks

Earn Monthly Passive Income: 2 Hot Dividend Stocks in Canada to Buy Now and Hold Forever

These two hot dividend stocks could help you to earn stable monthly passive income in Canada.

Read more »

Human Hand Placing A Coin On Increasing Coin Stacks In Front Of House
Dividend Stocks

Be a Landlord: Top 2 REITs (With Monthly Dividends) I’d Buy and Forget

You can be a landlord and earn monthly dividends for the rest of your life. All you need is the…

Read more »

Target. Stand out from the crowd

3 Canadian Stocks to Buy That Beat Their Earnings Expectations This Week

If you're looking for top Canadian stocks to buy, here are three impressive companies that continue to perform well in…

Read more »

A stock price graph showing declines
Energy Stocks

2 Cheap Canadian Stocks That Likely Won’t Be on Sale For Much Longer

These two Canadian stocks are close to returning to all-time highs. Don’t miss your chance to take advantage of these…

Read more »

A worker gives a business presentation.
Dividend Stocks

Got $5,000? 3 Stocks to Hold for the Next 20 Years

New investors don’t need tens of thousands to start a portfolio. Here are three stocks to hold for the next…

Read more »

canadian energy oil
Energy Stocks

3 Rising Energy Stocks to Buy as Oil Hits 6-Month Low

Three rising energy stocks are strong buys today as their upward momentum is likely to continue due to the tight…

Read more »