JC Penney: How to Destroy a Beloved Department Store
Ron Johnson is becoming the laughing stock of retail, as he continues his merry ways, destroying what was once one of the best performing stores in the US, JC Penney.
Johnson became the Penney’s CEO last year, after years working for Apple Computer where he ran their retail stores. He has tried to impart a little of the Apple magic into this traditional chain and failed miserably. Did you wonder how those new ads touting “no more discounting, no more sales” were going to work out?
The answer? Terrible. Awful. After making a good profit in 2010, Johnson brought on the new price strategy, rounding all of the prices out, as if it was better to call it $7 instead of $6.95. But it isn’t.
Sales have been dismal, and the company posted a huge loss. The president of Penney’s bailed out in June, and now everyone is wondering how long Johnson will last. He’s told BusinessInsider that he envisions employees toting iPads will run around and ring up customers.
He said he expects to have a cafe in each store, to keep people shopping. His main focus has been to create small shops within the stores–so it’s not JCP, it’s a little mall inside a mall. He thinks they have too many sales, so he’s cutting that down to 12 instead of 120. In April Johnson laid off just about every top executive in the Plano Texas headquarters. Not a way to get loved. Johnson also eliminated salespeople’s commissions, and lopped off another thousand managers from their payroll. Again, how much do you want to be hated?
Yet most what most people love about Penney’s are the sales. They love the markdowns and the big savings, or their perception of them. So far, they hate the new price policy and are confused. So sales are slumping.Macy’s must be saying thank you thank you!
Analysts say his days are numbered. And the coupons are coming back.