J.C. Penney’s Last Shot at Survival

One year ago J.C. Penney (JCP) CEO Ron Johnson laid out a plan to change the way the world thinks not just about Penney's but the entire department store model. New pricing, fully refreshed stores designed to be a destination "mall within a mall" and partnerships with fashion forward brands never before associated with the dowdy J.C. Penney.

"All it takes is courage" Johnson told a packed audience, "We can change a brand overnight."

Suffice it to say Johnson and J.C. Penney fell short of those lofty ambitions. Last night it concluded one of the worst years in corporate history with the announcement of their 4th Quarter results. How bad was it? Consider:

    JCP lost just short of a billion dollars for the year with $551 million of that coming in the all important holiday period.
    Total revenue fell 25%
    The company sacked more than 30% of the employees at its Dallas HQ; more than 1,600 people
    Internet sales dropped a stunning 34%. For perspective rival Macy's (M) grow its online business 48%

"We made some big mistakes and I take personal responsibility for this" Johnson said last night with atypical humility. "Experience is making mistakes and learning from them and I've learned a lot".

What Johnson's customers have learned over the last 12 months is that the 111-year old department store chain can no longer be trusted. J.C. Penney first abandoned then restored promotional pricing. It hyped refurnished stores before even 1/3 of the chain had been redone. Legacy customers were jettisoned before new shoppers were secured.

Good retailers set customer expectations then seek to do just a little better. Wal-Mart (WMT) is self-serve. Target (TGT) is fashion at a great price. Tiffany (TIF) is all about fawning all over shoppers. Having been through no fewer than four different marketing campaigns in 2012 alone, the J.C. Penney shopping experience varies from month to month and store to store.

Customer don't like surprises which is why 17% fewer of them even bothered to step into a J.C. Penney store last year.

They say that airplane crashes happen after pilots run out of altitude and ideas. Retailers go bankrupt when they run out of money and time. J.C. Penney is burning through cash at a stunning rate, resorting to measures like slow-paying vendors and selling goods at a loss just to create liquidity. Sales continue to get worse and are shrinking at a pace that suggests it could be in serious financial trouble by this summer if things don't improve.

Main Street would rather get a root canal than shop at J.C. Penney. Wall Street has left the company for dead. The stock is down more than 55% in the last 12 months and fell 15% in response to the results announced last night.

The clock is ticking. J.C. Penney only has enough money to take one more Hail Mary shot at survival. The latest, best, marketing campaign premiered during last Sunday's telecast of the Oscars. Based on what we've seen so far, J.C. Penney just might have a better chance than most people think.

Too Little Too Late?

Retail expert Hitha Prabhakar thinks JCP's new "Dear America" campaign is far and away the best thing she's seen since Ron Johnson took over last year. The seven spots were moving, flirty, fun and different from anything the audience would have expected. They featured name-brand designers and lingerie, and were fashion-forward with a value. It's a message Johnson helped invent when he was with Target (TGT), and he clearly intends to take it even further now.

"The Oscar went to the J.C. Penney ad campaign," Prabhakar exclaims in the attached video. "They hit the nail on the head in terms of who they're trying to target and who they want in their store."

Consumers might actually be the winners in Penney's drive to survive. Forget promotions, the very best deals for shoppers come from desperate companies needing to clear merchandise at any price. Based on January when JCP cleared a massive amount of inventory at a loss JCP is on the verge of becoming an 1,100 store discount bin.

The bottom line is Penney's either executes on its latest promise and creates a cool place to shop or goes into a death spiral and is forced to hold the largest Going Out of Business sale in American retail history.

That leaves shareholders, Ron Johnson and thousands of remaining J.C. Penney employees as the only group at risk of losing it all.

Japan Nominates Haruhiko Kuroda as Central Bank Boss

Japan's government has nominated Haruhiko Kuroda to be the next governor of the country's central bank.

Mr Kuroda is currently the head of the Asian Development Bank and is seen as a supporter of aggressive monetary easing to help revive Japan's economy.

The government, which recently won a general election, wants the Bank of Japan to do more to boost growth.

Both the upper and lower houses of Japan's parliament will now need to vote and approve the nomination.

Kikuo Iwata and Bank of Japan official Hiroshi Nakaso were also nominated to serve as the central bank's deputy governors.
Win-win?

Prime Minister Shinzo Abe won the general election on a platform of promises to help revive Japan's economy, which has seen years of stagnating growth.

A more aggressive monetary policy stance by the central bank has been something that Mr Abe has been advocating for, citing it as key to spurring a fresh wave of economic growth.

During his election campaign Mr Abe had even hinted that the government may look at altering the law that ensures the central bank's independence if it does not take adequate steps.

Although Mr Abe toned down his rhetoric later on, it did indicate how crucial the appointment of a new governor would be, not just to the relations between the government and the central bank, but also the BOJ's independence going forward.

Analysts said that if Mr Kuroda's nomination is approved by the parliament, it would be a win-win situation.

"This clearly indicates that the government and the central bank will be working towards the same target and there will be an agreement on what direction the Japanese economy should take from here," Junko Nishioka of RBS Securities told the BBC.

Ms Nishioka added that with Mr Kuroda being a supporter of aggressive policies, it was unlikely that the government take the extreme step of altering the BOJ law.

"It does necessarily mean that the BOJ is not going to give up its independence," she added.
'Proactive approach'

Among the policies suggested by Mr Abe has been a call for stoking inflation as a means to boosting domestic demand.

Japan, unlike many other Asian nations, has been fighting deflation or falling consumer prices for best part of the past decade.

It has been a big hurdle in its attempts to boost domestic consumption as consumers tend to put off purchases in the hope of getting a cheaper and better deal later on.

Mr Abe has hinted that the central bank should print "unlimited yen" to help fight deflation and encourage price growth.

The idea being that with more money floating around, consumers will have more cash to spend and that will help drive up demand and consumer prices.

Under pressure from the government, the central bank doubled its inflation target to 2% last month, a move seen as key by many analysts to help revive domestic demand.

Mr Kuroda, who is seen as a advocate of inflation target, has suggested that the central bank should try and achieve a 2% inflation rate within two years.

"Under Kuroda-san the BOJ will take a proactive approach towards achieving the inflation target," said Ms Nishioka.

The government's aggressive stance has resulted in a sharp decline in the yen.

The Japanese currency has dipped nearly 15% against the US dollar since November last year.

The yen fell further on Thursday, down by nearly 1% against the US dollar, after the government announced Mr Kuroda as its nominee to head the central bank.

Pope, in Final Message, Says he's A Simple Pilgrim

Pope Benedict XVI greeted the faithful for the last time as pope on Thursday, telling well-wishers that he is beginning the final stage of his life as "simply a pilgrim," hours before he becomes the first pontiff in 600 years to resign.

Benedict arrived at the Vatican's vacation retreat at Castel Gandolfo after an emotional sendoff from the Vatican. His closest aide wept by his side as he bade farewell to Vatican officials gathered in the courtyard of the Apostolic Palace, Swiss Guards standing by at attention.

Bells tolled as the pope left the Vatican by helicopter and circled St. Peter's Square, where banners reading "Thank You" were held up skyward for him to see. The bells tolled anew as he arrived in Castel Gandolfo, whose central piazza was jammed with people eager to catch the last glimpse of Benedict as pope.

To a roaring cheer, Benedict, 85, appeared at the balcony of the palazzo where he will spend the first few months of his retirement. He said he was happy to be "surrounded by the beauty of the Creator" on this unique day.

As of 8 p.m., he said to applause, he would no longer be pope.

"I'm simply a pilgrim who is beginning the last stage of his pilgrimage on this Earth," Benedict said, as well-wishers wiped tears from their eyes.

It was an emotion-drenched day that began with Benedict's final audience with his cardinals, where he pledged his "unconditional reverence and obedience" to his successor, a poignant and powerful message to close out his eight-year pontificate.

In an unexpected address inside the Vatican's frescoed Clementine Hall, the pope appeared to be trying to defuse concerns about his future role and the possible conflicts arising from the peculiar situation of having both a reigning pope and a retired one.

Benedict also gave a final set of instructions to the "princes" of the church who will elect his successor, urging them to be united as they huddle to choose the 266th leader of the world's 1.2 billion Catholics.

"May the College of Cardinals work like an orchestra, where diversity — an expression of the universal church — always works toward a higher and harmonious agreement," he said.

It was seen as a clear reference to the deep internal divisions that have come to the fore in recent months following the leaks of sensitive Vatican documents that exposed power struggles and allegations of corruption inside the Vatican.

The audience inside the Apostolic Palace was as unique as Benedict's decision to quit, with the pope, wearing his crimson velvet cape and using a cane, bidding farewell to his closest advisers and the cardinals themselves bowing to kiss his fisherman's ring for the last time.

Some seemed to choke up at that moment, and a few lingered on to chat with the pope for as long as they could. But the scene seemed otherwise almost normal, with cardinals chatting on the sidelines waiting their turn to say goodbye.

Benedict said he would pray for the cardinals in coming days as they discuss the issues facing the church, the qualities needed in a new pope, and as they prepare to enter into the secret conclave to elect him.

"Among you is also the future pope, whom I today promise my unconditional reverence and obedience," Benedict told the cardinals.

Benedict's decision to live at the Vatican in retirement, be called "emeritus pope" and "Your Holiness" and wear the white cassock associated with the papacy has deepened concerns about the shadow he might cast over the next papacy.

But Benedict has tried to address those worries over the past two weeks, saying that once retired he would be "hidden from the world" and living a life of prayer.

In his final speech in St. Peter's Square on Wednesday, he said he wasn't returning to private life exactly, but rather to a new form of service to the church through prayer.

And on Thursday he went even further with his own public pledge of obedience to the new pontiff.

The Vatican spokesman, the Rev. Federico Lombardi, said the pope's pledge was in keeping with this effort to "explain how he intends to live this unprecedented situation of an emeritus pope."

"He has no intention of interfering in the position or the decisions or the activity of his successor," Lombardi said. "But as every member of the church, he says fully that he recognizes the authority of the supreme pastor of the church who will be elected to succeed him."

The issue of papal obedience is important for Benedict. In his last legal document, he made new provisions for cardinals to make a formal, public pledge of obedience to the new pope at his installation Mass, in addition to the private one they traditionally make inside the Sistine Chapel immediately after he is elected.

Benedict's resignation will be a moment of quiet theater.

At 8 p.m. sharp, the Swiss Guards standing at attention at Castel Gandolfo will go into the palazzo and shut the doors behind them and go off duty, their service protecting the head of the Catholic Church over — for now.

Lombardi said the guards would change into civilian clothes and return to the Vatican barracks Thursday night. They will continue to guard the entrances of Vatican City and the pope's palace, "even if he's not there," said Cpl. Urs Breitenmoser, a Swiss Guard spokesman.

And on Monday, the cardinals are expected to begin meeting to set the date for the conclave.

Benedict's decision has been met for the most part with praise and understanding. Cardinals, Vatican officials and ordinary Catholics have rallied around him in acknowledgment of his frail state and the church's need for a strong leader.

But Sydney Cardinal George Pell has caused a stir by openly saying the resignation has been "slightly destabilizing" for the church.

In an interview with Australian Broadcasting Corp., Pell noted that Benedict himself had acknowledged the shift in tradition; Benedict said Wednesday that he appreciated his decision was not only serious but "a novelty" for the church.

Pell also said the church was in sore need of a strong manager — comments echoed by several cardinals who have noted the 30-year reign of two popes who paid scant attention to the internal governance of the church.

The Vatican tried to downplay Pell's comments, saying it wouldn't respond to individual cardinals and urging the media not to take advantage of churchmen who, it said, aren't necessarily media savvy.

‘Twilight: Breaking Dawn – Part 2′ takes 7 Razzie Awards including Worst Picture

The 33rd Annual Razzie Awards saluting the worst Hollywood had to offer in 2012 were handed out Saturday, the night before the Oscars. And in a surprise move that's sure to raise the hackles of its legion of fans, "The Twilight Saga: Breaking Dawn - Part 2" was given seven awards, including Worst Picture. The one blockbuster hit to be nominated, "Breaking Dawn - Part 2" beat out the box-office bombs "Battleship," "That's My Boy," "A Thousand Words," and "The Oogieloves in the Big Balloon Adventure."

In addition, the final chapter of the "Twilight" series took home Worst Actress for star Kristen Stewart (she was nominated both for playing Bella Swan for "Snow White & the Huntsman"), Worst Supporting Actor for Taylor Lautner, Worst Director for Bill Condon, Worst Screen Ensemble, and Worst Remake, Rip-off or Sequel. Lautner also shared Worst Screen Couple with Mackenzie Foy, who played the half-vampire offspring Renesmee.

Kristen Stewart wasn't in attendance to accept her award in person like previous "honorees" Halle Berry (Worst Actress winner in 2004 for "Catwoman") or Sandra Bullock, who won the Razzie for Worst Actress for "All About Steve" in 2009 the night before she won the Oscar for Best Actress for "The Blind Side." Stewart is scheduled to be a presenter at tomorrow night's Academy Awards.

A few "Twilight" stars did dodge bullets in their respective categories, though. Robert Pattinson, who "lost" the Worst Actor trophy to Adam Sandler for "That's My Boy." Sandler has taken it two years running now, receiving both Worst Actor and Worst Actress last year for "Jack & Jill." Ashley Green also avoided getting the Golden Raspberry for Worst Supporting Actress. It instead went to Rihanna for her screen debut in the big-budget board game adaptation "Battleship."

Perhaps the luckiest man of the night was Tyler Perry, who didn't win any of the six awards he was up for, including Worst Actor and Worst Actress (for "Madea's Witness Protection").

This is the first time a "Twilight" film has been given the Razzie for Worst Picture, though previous installments "Eclipse" and "Breaking Dawn - Part 1" were nominated. And the piling on "Part 2" with 7 awards does seem a little unfair. The reviews weren't that bad for this last installment, with RottenTomatoes giving it a 48% positive (just down from the original film's 49%, but a big improvement over the 24% "Part 1" received). In comparison, Eddie Murphy's "A Thousand Words" has a 0% positive rating. Perhaps the Razzies felt that since they wouldn't have another chance to sock it to the "Twilight" series, they really wanted to make it count.

Seeing as how "The Twilight Saga: Breaking Dawn - Part 2" has already made $828 million worldwide, making it the highest-grossing installment of the series (which has earned over $3.3 billion at the box office), it seems the fans have already made their opinion about the quality of the movie known.

"The Twilight Saga: Breaking Dawn - Part 2" will be out on Blu-ray, DVD, and digital download on March 2.

Judge Rules That Yankees Are Baseball’s Only ‘Evil Empire’

It's only February, but I think we already have a pretty strong candidate for strangest baseball story of the year.

According to the Wall Street Journal, a company registered under the name of Evil Enterprises Inc. has been seeking exclusive trademark rights to the phrase “Baseballs Evil Empire” since June of 2008. Their intention? Release a clothing line — t-shirts, hats, jackets, and who knows what else — with the phrase "Baseball's Evil Empire" attached to them.

Good plan, I suppose, but there's one big problem with that. The "Evil Empire" phrase has long been associated with the New York Yankees.

In fact, it was Boston Red Sox CEO Larry Lucchino who coined it back in 2002 after New York signed Jose Contreras out from underneath them. It wasn't meant to be flattering, but it stuck, and in recent seasons we've even witnessed the Yankees beginning to embrace it by playing the Imperial March during home games.

That's why Major League Baseball immediately stepped in on their behalf to block Evil Enterprises' attempt to land the trademark. Eventually the Yankees themselves joined the fight, and apparently that's led to a long, drawn out battle that was finally settled before a panel of trademark judges in Washington D.C. earlier this month.

That makes it officially official. Anytime you hear or see the phrase "Baseball's Evil Empire" it's a direct reference to the Yankees and no one else. That cool, Evil Enterprises?

I wouldn't bother with that, Gerard. We've all heard it used in reference to other teams, sure, but the original is the original. It just doesn't pack the same punch unless you're talking about the New York Yankees, and to argue baseball fans would think anything else when looking at your apparel is fairly absurd.

We're sure you could do better anyway, so give up the battle and wow us with something original and creative.

Pistorius' Brother Facing Culpable Homicide Charge

Oscar Pistorius' Brother Facing Culpable Homicide Charge: The family lawyer of Oscar Pistorius says the brother of the Olympic paraplegic athlete is facing culpable homicide charge in a 2010 road death.

Laywer Kenny Oldwage would not confirm details of the case Carl Pistorius is facing, but Sunday's development is compounding the problems for the family after Oscar was charged with premeditated murder in the Feb. 14 shooting death of girlfriend Reeva Steenkamp.

Local media reported that Carl Pistorius was allegedly involved in a crash with a woman motorcyclist and that he was to face trial last Thursday, as his brother Oscar was facing a bail hearing.

Oscar Pistorius was released on bail Friday and his brother Carl was seen driving into the affluent villa of their uncle Arnold early Sunday, where Oscar is staying while on bail.

Cuba Parliament Gathers, Will Elect President

Cuba's parliament reconvened Sunday with new membership and was expected to name Raul Castro to a new five-year-term as president. All were watching whether younger politicians might be tapped for other top leadership posts, providing hints of a possible future successor.
Castro fueled speculation on Friday when he talked of his possible retirement and suggested he has plans to resign at some point. It was unclear whether the 81-year-old leader was joking, but he promised his speech Sunday would be "interesting."
If a fresh face is named as one of his top deputies, it could indicate that his administration is settling on who might carry the country forward when those who fought in the 1959 revolution can no longer do so.

Raul Castro turns 82 this year and would be 86 when a new term ends. His top two lieutenants are also in their 80s.
"This National Assembly is important because it formally is going to govern the fate of the country for the next five years, which will be decisive for changing personnel — what I call the intergenerational transition," said Arturo Lopez-Levy, a Cuban economist and analyst who lectures at the University of Denver. "The intergenerational transition cannot be put off any longer."
The 612 legislators were sworn in during the morning and then picked economist Esteban Lazo as the National Assembly's first new chief in 20 years.
Lazo, who turns 69 on Tuesday, is a vice president and member of the Communist Party's ruling political bureau. Parliament meets only twice a year and generally passes legislation unanimously without visible debate.
Ricardo Alarcon, who had been the body's president for two decades, was not on the ballot this year.
The assembly will also nominate the Council of State, Cuba's maximum governing body, which is made up of the president, a first vice president, five vice-presidents, a secretary and 23 other members.
The president also oversees the Council of Ministers, or Cabinet.
Castro has spoken in the past of implementing two-term limits for public officials up to and including the president, as well as the importance of grooming new leaders to take over from his graying generation.
This would be his second full term after formally assuming the presidency in 2008. He took over provisionally in 2006 when his elder brother, Fidel, was stricken with a life-threatening intestinal illness.
Raul Castro is about halfway through a program of key social and economic reforms that have already seen the expansion of private business activity, legalized home and car sales, an easing of restrictions on foreign travel and the handover of fallow state land to independent farmers.
Cuban state media said both Castros received a standing ovation when they arrived at a Havana convention center for Sunday's parliamentary gathering.
The brothers sat next to each other at the assembly, along with first vice president Jose Ramon Machado Ventura.
Foreign media were not invited to the early parts of the gathering, but were promised access to its closing moments.