'Building Permits? No Thanks!' - Former JCPenney (JCP) Executives
During his brief tenure, former CEO Ron Johnson laid plans to commence an aggressive expansion plan in about 700 locations. Part of the plan called for a dedicated home goods department, which is coming under fire given recent scuffles with Macy's (NYSE: M) over Martha Stewart Omnimedia (NYSE: MSO) agreements.
However, company lawyers are now taking a look into whether some rules were skirted to push the plan through. The group of human resource and legal team members is interviewing employees on JCPenny's construction segment. Specific allegations weren't made and it isn't clear whether a suit might be brought against Johnson.
The NY Post today said that tight deadlines caused some execs in the construction unit to push contractors, sometimes forging ahead without procuring building permits.
VP of Real Estate and Construction Benjamin Fay was said to leave JCPenney last week and new CEO Mike Ullman has appointed Tom Clerkin in his place. Clerkin previously held the role before Johnson came aboard.
Rushing construction has tapped JCPenney's cash, with the retailer last week announcing plans to draw down its $1.8 billion revolving facility by $850 million, while also mulling the potential of putting up real estate and inventory assets for another loan.
Shares of JCPenney are up 0.7 percent Monday.