How J.C. Penney Is Distancing Itself From The Ron Johnson Era
J.C. Penney is back in the snow globes business. It’s just the latest in the Plano-based retailer’s moves to return to a more traditional focus for its stores after the tenure of CEO Ron Johnson, which often gets tagged with adjectives like “disastrous.”
Johnson’s vision for the company was certainly bold, but disastrous is as disastrous does, and the results of his time at the company speak for themselves: after sixteen months, the company’s stock fell by almost fifty percent, 19,000 employees had lost their jobs, and sales fell more than 25 percent. Budget department stores like J.C. Penney face a tough road in the current environment—fellow mall occupant Sears is a mess, too—but the unconventional thinking that Johnson brought to the company helped things slip further faster, and they gave people some strong talking points about exactly how he was screwing things up. Let’s look at some of the moves that Johnson made that J.C. Penney is currently trying to distance itself from.
When you think of giant mall department stores like J.C. Penney, you’re probably thinking “there’s a place I can go to save some money.” But Johnson, who made his bones at Apple, thought that the policy of never discounting anything would be a good one for J.C. Penney. Apple products almost never go on sale (the company probably even runs its own eBay store to protect that image). There’s something to be said for things that just cost what they cost, versus retailers playing head games by offering products that are constantly on sale for forty percent off—but what works for Apple doesn’t necessarily work for J.C. Penney, and if you’re going into a Penney store, you’d probably just rather feel like you’re saving a bunch of money.
Creating In-House Stores That Didn’t Make Much Sense
One of Johnson’s big successes with Apple was the Apple Store, the fancy, gleaming-white, museum-like retail outlet that lets people buy Apple products directly from the manufacturer. It created a personal experience with a brand that a lot of people have a highly emotional connection with, a storefront manages to symbolize technological advancement and living in the future.
That makes sense for Apple, but it’s not what people go to J.C. Penney for. Similar ideas of Johnson’s, like Apple’s “Genius Bar,” that he tried to import to Penney failed. A “Denim Bar” didn’t bring in young shoppers, it just confused the old ones. A high-end “JCP Home” in-house store, with products branded by Martha Stewart, just made people uncomfortable, new CEO Mike Ullman told the Huffington Post in August:
Ullman confirmed that the 500 J.C. Penney locations that opened new home stores lost traffic compared to locations without the upgraded department — despite the millions the company invested in renovations to create the gleaming new area. Ullman said he plans to reallocate space to different products and change what’s sold in the home store.
The effect of bringing in different in-house stores was contrary to the identity of J.C. Penney, the company’s new management suggested. From the same Huffington Post story:
“Stores still joke that the Johnson-era ‘shops’ are like museums,” the insider said. “People are afraid to touch and look at it from the aisles.”
Putting Clothing In The Hands Of Nick Wooster
You know who was psyched about the installation of Nick Wooster, a menswear-blog idol who’s frequently photographed for street-style shots and who made his name at Neiman Marcus and Bergdorf Goodman, as senior vice-president of product development? Menswear bloggers. You know who wasn’t? Just about everybody else. And it turns out you can’t sustain a major retail outlet off of the enthusiasm of street-style savvy dandies who describe the quality of the company’s oxford cloth button-down as “scary good.”
Wooster insisted that product is key, but his demeanor turned off people who shop at J.C. Penney. When he took questions this spring at a forum hosted by Women’s Wear Daily, he refused to give numbers, and then crankily dismissed skeptics:
[W]hen questioned from a doubting audience member, he added that the store’s turnaround centers on a better product offering. “I’m going to get in trouble for saying this, but [we need to] make cute shit,” said Wooster. “If we have compelling product, people will come into the store. I firmly believe that’s the job of merchants. Am I done yet?”
Believe it or not, most J.C. Penney shoppers don’t give a flip about the side-pleats on the oxford cloth button-downs, and ending a Q&A with your critics with the words “Am I done yet?” doesn’t do much to ease their skepticism.
The Broadest Possible Return Policy
It’s a good idea in theory: Stores want their customers to be happy, so offer them a return policy that doesn’t make them feel like they’ve been ripped off. For J.C. Penney under Johnson, this meant they could return “any item, any time, anywhere, no restrictions.” Items returned without a receipt would be refunded at the current price. Custom window treatments would be taken back. It was very customer-friendly, which is the goal of any retailer. Except, as the Huffington Post explained:
J.C. Penney’s “Happy Returns” policy, instituted by Johnson, had promised customers that they could return “any item, any time, anywhere, no restrictions.” It was eliminated in June. According to several J.C. Penney associates, the policy had caused rampant theft in their stores. One J.C. Penney employee explained that his store in New Jersey was “trampled” by thieves, as shoplifters would steal high-priced merchandise from one store and return it at another for gift cards, which they would then resell for cash.
Awesome deal if you’re a customer, or a thief. But not great for the bottom-line of a large retailer without the security of, say, an Apple Store.
This Tea Kettle That Looked Like Hitler
Okay, it’s hard to blame this one on Johnson, but that tea kettle seriously does look like Hitler.