J.C. Penney Company, Inc.: Surviving the Ron Johnson (CEO) Era

Abstract

Ron Johnson, the architect behind Apple's wildly successful retail stores and 15-year Target veteran, became J.C. Penney’s new CEO in November 2011. J.C. Penney had high hopes for Johnson, who proceeded to make drastic changes to the company including the implementation of a new logo and a new spokesperson (Ellen DeGeneres). His vision included transforming 700 of the largest J.C. Penney stores into collections of some 100 branded shops with a central "town square" gathering area for services. Johnson planned to implement a simplification of the company’s pricing strategy including a reduction in the number of times prices were marked down. Johnson knew that transforming J.C. Penney's 1100 department stores nationwide would take considerable time and effort, and that changes would also involve jobs cuts, including nearly 1,000 employees at its headquarters, and closing one of its three call centers. J.C. Penney dismissed Ron Johnson after just 17 months, following a disastrous decline in business directly attributable to the failure of the new business plan. Ex-CEO Mike Ullman then re-joined the company and was charged with stabilizing the retail chain, which was in a free fall after racking up almost a billion dollars in losses in 2012 as revenue plunged by nearly 25%.