Sam Oliver
JC Penney Chief Executive Ron Johnson, who formerly ran Apple's retail business, is under fire after overseeing the company's lowest sales in more than two decades.
The department store chain reported this week that its net loss in the quarter ending Feb. 2 was $552 million, up from a loss of $87 million a year ago, according to Bloomberg. JC Penney's annual revenue was $13 billion, its lowest since 1987 and half that of competitor Macy's.
Ron Johnson at JC Penney's 'fresh air' event. | Source: JCPenney
Johnson admitted to investors that he had "made some big mistakes" in his tenure as CEO, which began in November of 2011. In particular, Johnson spearheaded a new strategy that replaced coupons and sales with "Every Day" low prices.
In a change of course, customers are now being sent more coupons and discounts to drive traffic, while promotions for holidays and events such as Valentine's Day and back-to-school season have been reimplemented.JC Penney's $13 billion in annual revenue was its lowest since 1987 and half that of competitor Macy's.
StorefrontBacktalk notes that, during the company's quarterly conference call, Johnson said that all JCPenney associates would be getting iPod touches for point-of-sale operations.
"Every employee on the floor of a JCPenney store will carry an iPod and be able to check out customers any time and anywhere in the store," Johnson said. "Last week, 25 percent of all transactions were conducted on a mobile device. And this quarter, we will start to feed product information, training, and all of our employee systems directly to employees through our in-store Wi-Fi networks on these iPods."
Johnson found himself quickly scrutinized once he took over JC Penney, implementing changes such as a new pricing model and store-within-a-store concepts. Johnson's changes were criticized for reducing foot traffic in JC Penney's stores.
Johnson's struggles at JC Penney stand in contrast to his tremendous success at Apple, where he spearheaded the Mac maker's retail initiative. Apple Chief Executive Tim Cook currently views the company's heavily trafficked retail stores as the "face" of the company.
"There's no better place to discover, explore and learn about our products than in retail," Cook said earlier this month at the Goldman Sachs Technology and Internet Conference. "Our team members there are the most amazing, awesome, incredible people on Earth. It's the best retail experience, it's an experience where you walk in and instantly realize it's for the purpose of serving, not selling."
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51 Comments
I think it might have been the double-entendres that did him in.
Good thing he left Apple, otherwise all of those smart stock analysts would be blaming him for the decline in stock price and that Apple is doomed. The JCP thing doesn't appear to have been a smart career move in hindsight. Apple is still looking for his replacement, maybe he can come back home?
It's a real shame that Johnson's vision isn't catching on. It says a lot about the rationality, or lack thereof, of consumers. He took all the guesswork out of shopping: no coupons, no worrying that something will go on sale tomorrow, no excessive markups followed by extreme markdowns to give the appearance of "a good deal"... just honest, everyday low prices. I love it.
You can get a nice dress shirt from JCP for $20. You go into Kohl's and can find the same shirt marked at $80.... plus 50% markdown... plus an additional 25% markdown... plus $10 in Kohl's cash and you walk out of Kohl's paying $20 for the shirt. It's sad that consumers enjoy this game mark-ups and mark-downs and honestly feel that the shirt from Kohl's is a better bargain than the one from JCP.
I refuse to shop at stores like Kohl's and Boston Store where I have hunt down the sales and the coupons and the e-mail clubs. I support stores like JCP because they have no-hassle low prices and EVERY customer enjoys the same prices. But, if consumers would rather cut coupons, browse the weekly ads, and open store credit cards to pay the same price that they would at stores like JCP, what can you do?
Good thing he left Apple, otherwise all of those smart stock analysts would be blaming him for the decline in stock price and that Apple is doomed. The JCP thing doesn't appear to have been a smart career move in hindsight. Apple is still looking for his replacement, maybe he can come back home?
Apple doesn't hire losers.
Johnson's mistakes have been fascinating, especially the failure of pricing simplification. Apparently customers want to be manipulated by "sales" instead of knowing the price will be a fair deal no matter when they go.