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Let us be clear: we have not been bullish on JCP for some time now despite calls from “legendary investor” Bill Ackman that this company has legs. With the departure of President and Head of Merchandising Michael Francis, the credibility of this company is shot to pieces.

Francis was only at the company for 9 months and took a nice paycheck along with it – not a bad trade. Any morale that was left in this company has left the building. Confidence in the company has eroded both publicly and privately. After all, last we checked, no one is looking to purchase sweater vests. CEO Ron Johnson’s turnaround plan is progressing, but this is a huge setback.

Hedgeye Retail Sector Head Brian McGough has outlined four issues with the company that are plaguing JCP:

Make no mistake, this is an unmitigated disaster, for four reasons. 1) Francis just hired a merchandising organization. Now he's out. What does that tell the troops as it relates to organizational stability? 2) He probably did not get canned because 'he was smoking plan.' 3) What happened to a long-term plan? 4) ) Most notably, this blows Johnson's credibility, which was already hanging by a thread after how poorly he handled the 1Q release, and sold stock before the event.”

For those that can wait out the next five years to witness Johnson’s almighty plan, we salute you. We implore you to watch the above video when McGough appeared on CNBC back in December of 2011 and essentially schooled the Street on what was really going on behind the scenes at JCP.