Is Apple Damaged as Retail 'Visionary' Leaves for JC Penney?

On Tuesday shares of Apple and JC Penney landed on almost every investor’s radar after the department store staged what some consider a corporate coup d’etat.

Penney inked a deal with Ron Johnson - the architect of Apple’s retail strategy - to become its next CEO, as of November 1st.

”Apple’s retail is the best retail on a sales per square foot basis that’s out there,” explains trader Patty Edwards.

JC Penny Takes A Bite Out of Apple
JC Penny Takes A Bite Out of Apple   

”Johnson changed Apple’s retail experience,” adds Piper Jaffray analyst Gene Munster in a live interview. “Lots of people failed at computer retail. He’s the guy who re-engineered it.”

Munster tells us that Johnson developed the concept of the genius bar at the Apple store – and he’s the guy who made Apple stores more of an experience, than a store. ”He’s a visionary,” says Munster. “It’s a loss for Apple and a win for JC Penney.”.

If you’re an investor that leads to two questions – how much of a loss does this executive departure pose for Apple -- and how much of a win is it for JC Penney?

Impact on Apple

Gene Munster remains an Apple bull. He says there’s a number two guy at Apple that has worked closely with Johnson that will likely take his job.

”It’s important to know that Apple’s retail game plan remains in place,” he says. “It’s been in place for the last few years and so it’s just a matter of taking the footprint and rolling it out to more countries. (The staff change) is not a huge issue in terms of the fundamentals of Apple.

However Munster admits there’s a wild card. “Are there any other major people at Apple that would consider leaving,” he muses. “Other companies are willing to pay absurd amounts of money to get these executives.”

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Trader Brian Kelly is incrementally cautious. He thinks over the next couple of quarters the product cycle at Apple remains in tact, but after that investors will need to keep a close eye on the company’s trajectory. “You have to ask yourself how deep is Apple’s bench?” he says

Steve Cortes is skeptical of Apple and sees developments as just the latest hurdle facing the tech titan. As a trader Cortes is more focused on the price performance of the stock. “It’s a stock that everyone loves to talk about but nobody seems to be buying and it’s underperformed the market for months.”

”Growth from here will be far more difficult,” Cortes adds. They’re going to have to find it overseas and at Apple’s price points that could be difficult.”

Joe Terranova thinks the story at Apple remains the same. “Those that believe this is going to negatively impact Apple are probably wrong,” he says.

Impact on JCPenney

It seems most everyone we spoke with thinks the move is a slam dunk for JC Penney.

Piper Jaffray analyst Jeff Klinefelter calls these developments a “coup for Penney.” He considers it a great move. “Ron is a rare breed of executive in retail. He’s got design experience and experience across many different product categories.”

Klinefelter tells Fast Money that not only did have great success at Apple but also Target before that. “I had the benefit of working with Ron at Target and he did great things for the merchandising….I think it brings a great merchant leader into JC Penney,” he says.

Trader Patty Edwards is equally enthusiastic. She calls Johnson “a phenomenal move for JC Penney.

Looking at the trade, Edwards likes Penney's stock. “JCP valuation is still fairly cheap for the long term,” she says, but Edwards also suggests waiting for a pullback before getting in.

Joe Terranova is also bullish. He suggests buying a quarter of your position today and then averaging in over the next 6 months. “I’m hoping JCP pulls back so I can get in.”



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Trader disclosure: On June 14, 2011, the following stocks and commodities mentioned or intended to be mentioned on CNBC’s "Fast Money" were owned by the "Fast Money" traders; Cortes owns (GOOG); Cortes owns (SVU); Cortes is short the Nikkei; Cortes is short the Australian Dollar; Cortes is short Silver; Cortes is short (BIDU); Brian Kelly owns the New Zealand Dollar; Brian Kelly owns (USO) puts; Brian Kelly is long U.S. Dollar; Brian Kelly is long (IWM) puts; Brian Kelly owns (MON) ; Brian Kelly owns (DBA); Terranova is short (DELL); Terranova owns (FCX); Terranova owns (F); Terranova owns (CVI); Terranova owns (AAPL); Terranova owns (VRTS); Terranova owns (IBM); Terranova owns (MA); Terranova owns (HPQ); Terranova owns (VRTS); Terranova owns (XOM); Terranova owns (BJ); Terranova owns (DAR); Terranova owns (TM); Terranova owns (MCD); Terranova owns (PEP); Terranova owns (BX); Terranova owns (CAT)

For Patty Edwards
Edwards Owns (AAPL) For Clients
Edwards Owns (COST) For Clients
Edwards Owns (GOOG) For Clients
Edwards Owns (MSFT) For Clients
Edwards Owns (TGT) For Clients
Edwards Owns (JWN) For Clients

For Gene Munster
Piper Jaffray Is A Market Maker In (AAPL)

For Jeff Klinefelter
Piper Jaffray Usually Provides Bids And Offers For The Securities Of (TGT), (JCP) And Will, From Time To Time, Buy And Sell The Securities Of These Companies On A Principal Basis

For Brian Kelly
Accounts Managed By Brian Kelly Capital Are Long New Zealand Dollar
Accounts Managed By Brian Kelly Capital Own (USO) Puts
Accounts Managed By Brian Kelly Capital Are Long U.S. Dollar
Accounts Managed By Brian Kelly Capital Own (IWM) Puts
Accounts Managed By Brian Kelly Capital Own (MON)
Accounts Managed By Brian Kelly Capital Own (DBA)
Accounts Managed By Brian Kelly Capital Are Short Euro
Accounts Managed By Brian Kelly Capital Are Short (JJC)

For Joe Terranova
Terranova is Chief Market Strategist of Virtus Investment Partners, LTD
Virtus Investment Partners Owns More Than 1% Of (ABAX)
Virtus Investment Partners Owns More Than 1% Of (AMKR)
Virtus Investment Partners Owns More Than 1% Of (CCG)
Virtus Investment Partners Owns More Than 1% Of (CASS)
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Virtus Investment Partners Owns More Than 1% Of (NRCI)
Virtus Investment Partners Owns More Than 1% Of Sun Pharmaceutical|
Industries Ltd.
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Virtus Investment Partners Owns More Than 1% Of (XLB)
Virtus Investment Partners Owns More Than 1% Of (XLV)
Virtus Investment Partners Owns More Than 1% Of (XLP)
Virtus Investment Partners Owns More Than 1% Of (XLY)
Virtus Investment Partners Owns More Than 1% Of (XLE)
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Virtus Investment Partners Owns More Than 1% Of (WDFC)
Virtus Investment Partners Owns More Than 1% Of (YDNT)
Virtus Investment Partners Owns More Than 1% Of DOMINO'S PIZZA UK &
URL PLC



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