Ron Johnson, the former chief executive officer of J.C. Penney Company, Inc (NYSE:JCP) was heavily criticized by both analysts and investors regarding the transformation efforts he implemented to turn around the company that most agree didn’t work.
Prior to joining J.C. Penney Company, Inc (NYSE:JCP), Johnson had a good reputation as an executive, particularly as head of the retail business of Apple Inc. (NASDAQ:AAPL). He successfully established the retail brand strategy of Apple Inc. (NASDAQ:AAPL) and its stores generated the highest revenues per square foot.
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Ron Johnson’s improving J.C. Penney sales
Johnson tried to rebuild the brand of the century-old department store chain by creating mini boutiques within the stores, as well as removing the coupons and the majority of sales events. Instead of attracting more customers, they stayed away en masse. The sales of J.C. Penney Company, Inc (NYSE:JCP) plummeted including its stock value. Analysts and investors considered his turnaround strategy a big mistake.
The management of the department store chain ousted Johnson in April. His reputation was shattered. Since leaving the company, he remained quiet about his term as at J.C. Penney Company, Inc (NYSE:JCP).
Ron Johnson on J.C. Penney’s business
After several months, Johnson broke his silence in an e-mail to Barbara Thau, contributor at Forbes ,stating that the reports regarding his tenure at J.C. Penney Company, Inc. (NYSE:JCP) have been “lacking in depth, largely inaccurate, and surprisingly uninformed.” The former CEO of the department store chain did not elaborate his statement.
According to Thau, when Johnson served as vice president of merchandising at Target Corporation (NYSE:TGT), he was gracious enough to return a few of her calls and provided quotes regarding some issues even if the company avoided the press. Perhaps Johnson will step forward one of these days to explain his side and provide accurate information.
Meanwhile, J.C. Penney’s current CEO Mike Ullman is confident that the company will deliver positive same-store sales for the third quarter. The company has been aggressive in promoting its coupons and sales events.
J.C. Penney problems
During the WWD CEO Summit last Monday, Ullman said that two-thirds of the 30 problems faced by J.C. Penney Company, Inc (NYSE:JCP) when he took over have been fixed and there is no reason the company can’t get back to its traditional margin performance.
Ullman said, “Penney’s had 400 days going in one direction. Now we’ve had 200 days going the other direction. If we had two things [wrong] and we couldn’t fix them, we’d be in trouble. We have 30 things wrong. They can all be fixed, and we have the time to fix them.”
He added, “Turnarounds are about leadership. Not just with the leader. It’s also the team. When I came back, I was very encouraged to find the core team still there. We haven’t lost a key executive in the last five months.”