Morning Business Memo…
Meet the new boss at JC Penney. The same as the old boss. After just 16 months as CEO Ron Johnson is leaving the company to be replaced by his predecessor Mike Ullman, who served seven years as chief executive before departing in late 2011. The challenges he faces are immense. Johnson – who was the former retail chief at Apple – came in with plans for a radical shakeup at Penney. By almost every measure he appears to have failed. Shoppers fled. Johnson’s attempts to introduce a sharper, hipper brand image for the middle market store chain were met with a sharp slide in sales. Bargain-hungry customers became disillusioned after Johnson got rid of regular sales and coupons, replacing them with everyday low prices. The stock value plunged more than 50 percent during Johnson’s short tenure. But any fix will be far from easy. The retail environment is brutal. JC Penney shares slipped more than 5 percent in pre-market trading this morning after word of Johnson’s ouster by the board was announced.
The spring home buying season may lead to higher prices and even bidding wars for some houses and apartments. In most of the country it’s a better time to be a seller than it was a year ago. “The competition between buyers can be pretty fierce,” says Pat Esswein, who covers real estate at Kiplinger’s Personal Finance magazine. “In many cities now the inventory of homes that are available to buy is really low,” she tells ABC News Radio. It’s a good time to be a buyer because mortgage interest rates are around record lows, but says Esswein “you have to be prepared to make a competitive offer to that home seller.” If you are looking to buy, it helps to be pre-approved for a mortgage or better yet offer cash. “Cash offers re-assure sellers that you can close quickly and little fuss or muss,” says Esswein.
It’s that time again. Earnings season for large corporations. Aluminum maker Alcoa became the first big U.S. company to report 1st quarter numbers, and the results beat analyst expectations. Falling aluminum prices hurt sales at the world’s largest producer, but Alcoa profits jumped 59 percent compared to the year before because of cost cutting and one-time tax and accounting changes.
United Airlines is putting its grounded Boeing 787s back in the flight schedule, even though the plane is still grounded by the Federal Aviation Administration. The Dreamliner is on United’s schedule starting May 31. United Continental spokeswoman Christen David says the airline will make more schedule changes as it gets a better idea of when the plane will be cleared to fly. It’s planning to resume international 787 flying June 10 from Denver to Tokyo. Boeing has proposed a fix for the 787′s smoldering batteries, but it needs approval from the FAA. The fix will then have to be installed on each plane. United owns six 787s.
Richard Davies Business Correspondent ABC News Radio abcnews.com Twitter: daviesabc