30th Apr 2013

Out with the new and in with the old at JCPenney

17 months ago, amid much fanfare, former Apple exec Ron Johnson joined JCPenney as CEO. This month amid festering panic he has been replaced. Johnson ran the retail arm of Apple from 2000 to 2011 during which time he pioneered the concept of the Apple Retail Stores and the Genius Bar. Prior to this he was VP of merchandising at Target, the second largest discount retailer in the US. In 2011 JCPenney was on the hunt for a new CEO to revitalise the brand and they picked Johnson.

Apple’s retail operation is massively successful, as we all know. And so Johnson tried to apply his innovative retail style to the 110 year old retailer. He implemented a controversial no sales (discounts) strategy and introduced the store-within-a-store concept – offering trendier merchandise. But Johnson totally misread his more traditional customer base, he tried to give them something they did not want. Instead of revitalising the brand he tried to remake it; the bargain hunters balked and sales dropped dramatically. Johnson admitted “So our core customer, I think, was much more dependent and enjoyed coupons more than I understood.” This was a disastrous mistake. Johnson should have known his brand, and realised that what worked at Apple would not necessarily work at JCPenney.

Last year the ailing retailer lost almost a billion dollars, losing money in each quarter since Johnson’s hiring. The losses are so great that experts are questioning whether or not the company can survive.

So now JCPenney has placed Myron ‘Mike’ Ullman, the CEO who was shoved into retirement to make way for Johnson, back in the driving seat. Ullman has a tough job ahead of him. At the time of appointment he acknowledged his tricky position “I wouldn’t recommend that we go back to the way JCPenney was when I left. Things change.” But he added, “There’s no reason to try and alienate customers who want to try and shop at JCPenney.”

Will Ullman be successful second time round? Only time will tell. What we do know, is that a detailed first 100 days is an invaluable tool for keeping the newly appointed leader focused and on track during such a challenging time. With a plan, and a schedule of regular, rigorous reviews of progress, Ullman will certainly be getting off on the right foot.

For Ullman, the first 100 days as CEO will be particularly crucial – he is under pressure to make a real tangible impact ASAP as he has been in this position before. Ullman’s first 100 days will be read as an indicator of his potential for continued success, so he needs to prove himself, and fast.

Archive

 
 

Sign up to recieve notifications when a new post is added.

Please enter your details below: