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Guess The Profit Margin

Tyler Durden's picture




 

In today's finance lesson, JCPenney demonstrates what happens when one takes the X in TR=P*X a little too far. As for that "Old Normal" concept of of actually generating a profit on TR... well, just ask Amazon.

h/t @BrianSozzi

 

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Wed, 11/20/2013 - 12:54 | 4173733 Almost Solvent
Almost Solvent's picture

Who the fuck would mark down Izod to $1.97?

 

Must be an early going out of biz sale?

Wed, 11/20/2013 - 12:58 | 4173750 WhyDoesItHurtWh...
WhyDoesItHurtWhen iPee's picture

Maybe those are the "Irregular" size ones.

Wed, 11/20/2013 - 13:00 | 4173763 Careless Whisper
Careless Whisper's picture

In today's finance lesson,...

I don't know what the lesson really is, but JCP has been trading up 8% all morning.

Wed, 11/20/2013 - 13:07 | 4173791 Stackers
Stackers's picture

and someone will eventually buy those neon green and orange shirts and ever so stylish green and blue plaid shorts for $2

Wed, 11/20/2013 - 13:09 | 4173799 MillionDollarBonus_
MillionDollarBonus_'s picture

Time for corporate executives to take a pay cut so we can free up revenue for worker's pensions. Government pensioners are enjoying excellent pensions and retirement benefits - why shouldn't private sector workers enjoy the same rewards?

http://accredited-times.com/2013/11/15/retirement-tips-for-government-wo...

Wed, 11/20/2013 - 13:15 | 4173831 Say What Again
Say What Again's picture

I really dig the way ZH is getting into the academics

Etot = Ekin + Epot + U

Wed, 11/20/2013 - 14:00 | 4173988 CHX
CHX's picture

+1 + correction, you may even agree :-)

Etot = Ekin + Epot + f(U)

Wed, 11/20/2013 - 14:25 | 4174147 Say What Again
Say What Again's picture

How about this

Etot = Ekin + Epot + f(U) + Ck

Wed, 11/20/2013 - 13:36 | 4173908 Blano
Blano's picture

How come you don't show up much lately, that HLF distributorship keepin' ya busy?

Wed, 11/20/2013 - 13:48 | 4173944 jcaz
jcaz's picture

Heheeheh-  Que the bondholders, who are now pooping their pants while watching JCP liquidate what they THOUGHT were gonna be proceeds of the liquidation....

Burn baby burn!

Wed, 11/20/2013 - 13:10 | 4173812 fonzannoon
fonzannoon's picture

I paid $4 for those pants on the left 6 months ago, bought 4 of em. Fuckin deflation!

Wed, 11/20/2013 - 13:29 | 4173884 wtf1369
wtf1369's picture

Did they come with a free bowl of soup?

Wed, 11/20/2013 - 14:32 | 4174183 wtf1369
wtf1369's picture

+1 to both you and Sea for catching the Caddyshack reference!

Wed, 11/20/2013 - 13:43 | 4173928 Seasmoke
Seasmoke's picture

But it looks good on you. 

Wed, 11/20/2013 - 14:19 | 4174109 Xibalba
Xibalba's picture

must be made of gold and silver or something

Wed, 11/20/2013 - 13:08 | 4173795 Boris Alatovkrap
Boris Alatovkrap's picture

Of course is trade up, BTFD!

Wed, 11/20/2013 - 13:21 | 4173863 Caviar Emptor
Caviar Emptor's picture

Biflation lesson #16: as consumer buying power erodes, and end-demand ebbs, so must profit margins in a proportionate manner.

Wed, 11/20/2013 - 15:05 | 4174363 A is A
A is A's picture

Profit margin......... What's a profit margin???...... Oh, those!!! LOL. Don't be such and old timer!! Those don't matter any more!!!

 

Wed, 11/20/2013 - 13:10 | 4173809 Canadian Dirtlump
Canadian Dirtlump's picture

irregular sizes these days as in.... below 36 LOL!

Wed, 11/20/2013 - 12:59 | 4173757 Say What Again
Say What Again's picture

What does JCP and the guy selling Rolexes for $19.95 on the street corner have in common?

Wed, 11/20/2013 - 13:09 | 4173798 Hippocratic Oaf
Hippocratic Oaf's picture

Maybe they'll be drawn in by this $1.97 sales rack so they can push their $10 polo cologne and $4 Hai Karate

Wed, 11/20/2013 - 13:02 | 4173768 Froman
Froman's picture

Someone will go in there and just buy up the Izod (and other brand name stuff) for $1.97 and turn around and sell it on eBay for $5+ and get a good ROI.

Wed, 11/20/2013 - 13:15 | 4173833 GolfHatesMe
GolfHatesMe's picture

Last year I bought 10 of these for $2.97.  Now I look better while painting, or working in the yard.

Wed, 11/20/2013 - 16:22 | 4174827 Catflappo
Catflappo's picture

I am still patiently awaiting the $1.63 offer

Wed, 11/20/2013 - 17:45 | 4175176 Agent P
Agent P's picture

Notice the rack is still full.  It's the old Confucious saying: "If pants are marked down to $1.97, but there is no one in the store to see it, will the cash register still make a sound?"

Wed, 11/20/2013 - 12:56 | 4173744 10mm
10mm's picture

They have decent tall selection. 1.97, looks about right for are fake recovery times.

Wed, 11/20/2013 - 12:57 | 4173745 youngman
youngman's picture

If they buy one and steal two others..they might be able to make some money

Wed, 11/20/2013 - 12:58 | 4173752 Theta_Burn
Theta_Burn's picture

There's a JCP 5 mins from me.

I always liked the clothes there, I will be backing the truck up...

Wed, 11/20/2013 - 13:38 | 4173913 Blano
Blano's picture

I like their Claiborne dress shirts, but not at 50 freakin' bucks a pop.

Wed, 11/20/2013 - 15:14 | 4174431 A is A
A is A's picture

Their Claiborne was way nicer back in the day. It kind of fell off. Haven't seen a nice Claiborne in years aka since the "new" JCP. $50 bucks though?! WTF?! They are out of their mind.

I have noticed that their last deperate attempt is that they are raising all their price so you "feel" like you are buy something worth a damn. LOL. I tried this the other day. I tried to sell a bag of dog shit for $10 and no one would buy it so I started selling it at $20 assuring them it was a high quality bag of dog shit... well... I am sure you can figure out what my EBITDA was........ Some how trades can't figure out the same with JCP.

Wed, 11/20/2013 - 12:59 | 4173753 RiseOfTheMachines
RiseOfTheMachines's picture

0% Profits, 0% Interest Rates ...... 0% Return on Capital

Wed, 11/20/2013 - 13:37 | 4173912 corporatewhore
corporatewhore's picture

hey, but sales are up! everything's good, don't ruin the party

Wed, 11/20/2013 - 17:23 | 4175099 halfawake
halfawake's picture

"Sales are up, I'm happy."

Wed, 11/20/2013 - 13:39 | 4173921 Blano
Blano's picture

It's all about revenues, not profits, didn't you get the memo?

Wed, 11/20/2013 - 13:43 | 4173930 RaceToTheBottom
RaceToTheBottom's picture

But they make it up on volume.....

Wed, 11/20/2013 - 13:00 | 4173760 TeamDepends
TeamDepends's picture

IZOD just became uncool again.

Wed, 11/20/2013 - 13:04 | 4173780 puntme
puntme's picture

IZOD was never cool.

Wed, 11/20/2013 - 13:07 | 4173794 Hughing
Hughing's picture

unless you're a wheelsteailing scouse

Wed, 11/20/2013 - 13:21 | 4173862 Global Hunter
Global Hunter's picture

Scousers had a lot of opportunity in the 80s to travel the continent of Europe to pick up Lacoste, Fila, Ellesse etc. shellsuits for free

Wed, 11/20/2013 - 13:40 | 4173922 Say What Again
Say What Again's picture

They're cheaper than buying painters pants for when you're doing home improvement shit.

Wed, 11/20/2013 - 16:41 | 4174914 Ourrulersknowbest
Ourrulersknowbest's picture

Eah rrite eahhhh rrite!!!!
Ceammmm dtown ceammmmm dtown.

Wed, 11/20/2013 - 13:45 | 4173933 TeamDepends
TeamDepends's picture

While we never wore IZOD, there were many who did.

Wed, 11/20/2013 - 15:04 | 4174352 zipit
zipit's picture

With the collar turned up?

Wed, 11/20/2013 - 14:26 | 4174158 Cruel Aid
Cruel Aid's picture

Ask Berke Breathed about Izod

Wed, 11/20/2013 - 13:01 | 4173765 Quinvarius
Quinvarius's picture

Something completely scary:

http://www.cnbc.com/id/101210002

Dennis Gartman does not see froth in the stock market.

Wed, 11/20/2013 - 13:02 | 4173773 pragmatic hobo
pragmatic hobo's picture

i think my wife just had a heartattack ...

Wed, 11/20/2013 - 13:08 | 4173796 Seize Mars
Seize Mars's picture

There are laws keeping these idiots from selling below cost. If some shit is marked $1.97, you can bet they paid less for it

Wed, 11/20/2013 - 13:15 | 4173836 Almost Solvent
Almost Solvent's picture

There are laws ...

The speed limit only applies if a cop is around.

Fraud only applies if the government lackey is doing his/her job.

Wed, 11/20/2013 - 13:19 | 4173855 Big Corked Boots
Big Corked Boots's picture

Clothing markups are colossal - the average pair of jeans has like 50 cents of cotton in them - but with the manufacturing and shipping, maybe at $1.97 they are breaking even if that.

Wed, 11/20/2013 - 14:23 | 4174125 11b40
11b40's picture

Who told you that?  It is completely wrong.  In fact, it is against the law to tell a retailer what they can sell for.  Once they own it, they can sell it for whatever they want to.  Once, there were fair trade laws, but not for a long time.

Wed, 11/20/2013 - 16:07 | 4174757 Flagit
Flagit's picture

big stores sell popular items, like coffee, at a loss, to get you in the store.

they make up the difference if you buy other things while you are there.

Wed, 11/20/2013 - 13:10 | 4173808 economessed
economessed's picture

Does the Bernank know about this?  Because $2 bucks for new pants/shirts sounds deflationary to me, and there is no way we're ever going to be able to inflate our way out of servicing the debt if citizens discover that paying less for goods and services is preferable to underwriting Wall Street welfare.

Wed, 11/20/2013 - 13:12 | 4173820 666
666's picture

$1.97 is too expensive. I'll wait for it to go on sale.

Wed, 11/20/2013 - 13:16 | 4173839 pound the vix
pound the vix's picture

Walmart will match this price

Wed, 11/20/2013 - 13:16 | 4173841 steelhead23
steelhead23's picture

Y'know, ZH should beware a fueling the dark side here.  As pragmatic hobo alludes, posting photos of silly discounts on the cusp of our annual consumption orgy while we're still trying to pay our debts from the last, has the potential to encourage more debt glutony.  Believing that most ZHers believe that more debt is anathema to a sound economic future, ZH should stick to posting photos extolling the virtues of thrift - say photos of Jamie Dimon exiting his limo - so as to inculcate the masses with the wages of sin.

I'm only kinda kidding.  Heading over to JCP at lunch to check the clearance racks.

Wed, 11/20/2013 - 14:24 | 4174142 11b40
11b40's picture

Now I know where to do my Xmas shopping.

Wed, 11/20/2013 - 13:17 | 4173846 pound the vix
pound the vix's picture

5 Below can buy it all and sell it for $5

Wed, 11/20/2013 - 13:24 | 4173869 thecoloredsky
thecoloredsky's picture

The psychology of ending the price in a "7" could very well lift JCP back into a well organized top-tier retailer.

/s

Wed, 11/20/2013 - 13:25 | 4173873 Trimmed Hedge
Trimmed Hedge's picture

Buy for $2

Sell on eBay for $15

Wed, 11/20/2013 - 13:26 | 4173875 Peter Pan
Peter Pan's picture

The cancer is evident elsewhere on the globe as well.

My wife came back from a shopping spree recently from an exclusive shopping precinct where she had not been for a long time.

She picked up exclusive dresses that she has worn to weddings in the last two weeks which drew rave reviews. Little did people know that she picked them up for less than $40 each when the orginal prices were well over $500 each.

When I asked her about how many shops were closed she looked at me, drew a breath and said "it was scary, almost a third."

The experiments of our money masters are drawing to an ugly close.

Wed, 11/20/2013 - 13:37 | 4173910 Larry Dallas
Larry Dallas's picture

Post a pic of your wife wearing aforementioned "exclusive dress" or it didn't happen.

 

Wed, 11/20/2013 - 13:42 | 4173924 Blano
Blano's picture

Exactly.  Face and all.

Wed, 11/20/2013 - 13:47 | 4173940 Trimmed Hedge
Trimmed Hedge's picture

And just so we know it's not fake, have her hold a sign that reads: I WANT YOU TO UNDRESS ME, TRIMMED HEDGE

Wed, 11/20/2013 - 13:48 | 4173945 Peter Pan
Peter Pan's picture

LOL. Believe it or not I did not take any photos and in my time zone it is now the dead of night.

She actually said to me yesterday that I should try and see things from her point of view.

I promptly got up, went to the kitchen sink and looked out the window.

Wed, 11/20/2013 - 13:46 | 4173937 corporatewhore
corporatewhore's picture

was her outfit from lane bryant or the dress barn????  moooooooo

Wed, 11/20/2013 - 13:57 | 4173976 CHX
CHX's picture

JCP going mainstreet: Buy high, sell low.

Wed, 11/20/2013 - 13:59 | 4173987 corporatewhore
corporatewhore's picture

the real bargains are in the big and fat section.  sorry, that's big and tall

Wed, 11/20/2013 - 14:26 | 4174148 Downtoolong
Downtoolong's picture

Does that $1.97 include the rack and hangars too?

Wed, 11/20/2013 - 14:36 | 4174201 Peter Pan
Peter Pan's picture

Well the sign doesn't say $1.97 each so I presume it might be for the hangers, the rack and ALL the clothes.

Wed, 11/20/2013 - 14:46 | 4174251 syntaxterror
syntaxterror's picture

$1.97 still nets a 50% profit on anything made in Chinese prison camps.

Wed, 11/20/2013 - 14:53 | 4174296 NIHILIST CIPHER
NIHILIST CIPHER's picture

NOTE TO SELF.............................. Do NOT Buy MOAR Foreign made SHIT I do not need.

Wed, 11/20/2013 - 19:35 | 4175488 css1971
css1971's picture

Do not buy anything that costs less than the square footage it consumes.

Wed, 11/20/2013 - 15:15 | 4174434 yogibear
yogibear's picture

The big deal now is IPOing social media.

JCP is in the wrong business. 

Wed, 11/20/2013 - 15:14 | 4174435 QQQBall
QQQBall's picture

So that is what the inside of JCP store looks like? 

Thu, 11/21/2013 - 11:41 | 4177326 esum
esum's picture

keep in mind those pants were made in china and cost JCP 5 cents... 

and JCP will shortly be merging with the Salvation Army....

Thu, 11/21/2013 - 11:48 | 4177364 esum
esum's picture

sending back the clear spray rubber and getting the pants for my bro in law... two pair

ah darn

went there and all size 18 waist 

i am sure the JCP buyer got a bonus and midgets get a good deal 

Sat, 11/23/2013 - 15:37 | 4183798 GoldVsFRNdotCOM
GoldVsFRNdotCOM's picture

Profit margin?

Someone drawing jesus doodles in their economics book again?

Thu, 11/28/2013 - 20:24 | 4198009 Yen Cross
Yen Cross's picture

    When did Foxcon start manufacturing IZOD shorts.  Make sure you look for the slave tested label before you buy .

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