Lessons Learned from J.C. Penney

A few questions went through my mind when I heard Ron Johnson stepped down (as the press release reads) as CEO at J.C. Penney. One was the Ron Burgundy line, “Well, that escalated quickly!” And with former CEO Mike Ullman waiting in the wings to return to his job (on an interim basis), I also felt Ullman was Billy Martin to Johnson’s Bob Lemon.

But there are other, more-obvious questions that came to mind such as:

Testing?: Why did Johnson determine J.C. Penney was in such need of drastic change? And for that matter, why all that change, all at once? It seems Johnson went with his guy and his heart, and not with analytics. Instead of looking at why JCP customers shop in-store the way they shop, Johnson was on a mission to turn JCP stores into Apple stores. Even testing little things – like the pricing strategy and the price tags – in two or 3 markets could have helped Johnson see the light.

How will JCP win its customers back?: Ullman said in the company’s press release that he’d reach out to team members, shareholders and customers and find out how to right the ship. But it it too late? Has the alienated JCP shopper moved on to Target and Kohl’s? Or will the JCP customer be willing to forgive, and give the merchant a second chance?

With all the private label brands, they still lost money?: I was recently talking with a merchandising expert about the clearance sales going on at my local JCP store and on JCP.com. I wondered how poor JCP’s fourth-quarter results would be, based on about 70% of the men’s department being marked down after Christmas. And that’s when I was reminded of how many private labels JCP sells, and the potential mark-up associated with selling private labels at full price. But still, nearly a billion was lost in the fiscal year.

Why April 8?: Why not Feb. 27, when Johnson proudly announced everything was fine and dandy in Plano, TX? Did the board truly believe the March 15 launch of Canadian fashion line Joe Fresh, and a revamped home store in May, will help JCP differentiate itself?


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