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And now we all have a great big laugh at the expense of Ron Johnson. How arrogant J.C. Penney's boss was to think the retail magic he worked at Apple would work at a mid-tier department store! What a fool to believe J.C. Penney could be run on brands rather than constant discounting! How hubris is brought low!

What fun. Are we done now? Good. Because Mr. Johnson is not dead yet and J.C. Penney isn't either – at least for another quarter or two. Yes, Penney's fourth quarter, reported Wednesday night, was horrible. Same-store sales dropped a historically bad 32 per cent, even worse than the "how much worse can it get?" third quarter. Gross margins, which had hung in there for most of the year, dropped 6 percentage points from the year before.

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But Mr. Johnson still has time to fight on. The company generated $415-million (U.S.) in free cash in the quarter and its net debt position improved by about that much; it has $930-million in cash. It has room on its credit lines (though investors will not like it should they be tapped). Inventory levels are much lower than last year. And Mr. Johnson's real test comes next quarter, one full year since the new strategy was instituted. If he can show growth off the lower base established then, he can make a case that his approach is taking hold.

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