J.C. Penney downsizes Ron Johnson's big ideas

He may no longer be CEO, but new management has little choice but to follow his vision -- on the cheap.

By Aimee Picchi Jun 4, 2013 1:28PM

Shoppers at a J.C. Penney store in New York, NY on October 23, 2009 (© Mark Lennihan/AP)Dumping former chief executive Ron Johnson in the midst of his ambitious overhaul has left J.C. Penney (JCP) with a tough problem: How do you handle a controversial revamp that was too far along to completely abandon?

The answer is to continue with Johnson's vision on a smaller scale, Bloomberg reports, calling the new plan "Johnson Lite."

At stake is the company's enormous cash burn rate, which has seen the retailer spend more capital than any of its department store competitors. Last month, the beleaguered chain said it had secured a $2.25 billion loan as it seeks to recover from Johnson's missteps.

Returning CEO Myron Ullman is testing stripped-down versions of Johnson's vision for branded in-store shops, such as an area dedicated to selling khakis. Johnson's original plan for a Khaki Bar featured tables fitted with iPads loaded with style and sizing apps. The revised version looks more like a regular department store section, using mannequins and folded clothing, Bloomberg notes. 

So far, investors appear to be applauding Ullman's moves. JCP shares have jumped almost 12% since the company bumped Johnson and brought back Ullman, who had led the retailer from 2004 to 2011. 

Nevertheless, Penney's operations are continuing to burn through cash -- $752 million during the quarter ended May 4, as Bloomberg points out. 

That's prompting some plans to get scrapped altogether. Johnson's vision for coffee bars and food stands is no longer on the table. Nor is the idea of a town "square" offering yoga and Pilates classes. 

The fact was that many of Johnson's visions were simply too bold -- and too expensive. As MSN Money noted in April, the ex-CEO failed to test concepts -- and new pricing -- before ordering the massive makeover.

Follow Aimee Picchi on Twitter at @aimeepicchi

More on moneyNOW

Tags: JCPRetail
Jun 4, 2013 2:23PM
Return brands similar to Cabin Creek.  That brand fit a broad range of sizes and had classic style.
Plain and simple. Stop selling only long tee shirts. Some of us like our tee's to have a shorter length thus more flattering appearance. Not all of us wear our pants below our navel!!  The Baby Boomers are coming. Are you ready????? JCP???  That means more shoes in a FULL RANGE of Sizes, not just medium width!!!!!  Carry a stock of robes during the "OFF SEASON". Vary the styles too.  I have shopped at JCP since I was 12 years old and until the NEW CHANGES came in I was always pleased with the selection. So I have shopped all departments in the past and found what I needed.  Not so now!!!!!!  How about showing respect for your customers and not some IDIOTIC FASHION DESIGNER just geared for the young.  I am now 71 and forced to shop at the bargain basement of higher priced stores AND thru catalogs that come to my door.  I truly prefer to try on clothes before I buy.  I TRULY MISS THE REAL JCP!!!

Jun 4, 2013 3:16PM
Finally the high priced mail ads have stopped. Eighty percent of my past purchases for clothes were through JC Penny's. I love cotton and Penny's was the king of cotton clothes. So JC Penny's needs to bring back their previous cotton clothes designers and brand names, along with their coupon specials and I think they will slowly turn this ship around.
Jun 4, 2013 3:10PM
So, now that the arrogant Ron Johnson has been dumped, too much money has been pumped into his ideas.  Even though he invested $55 Million of his own money, it was lost in the first qtr he was CEO.  They should have dumped him then, rather than send out surveys, etc.  JCP attracts "older" customers, not teeny-boppers.  Just check the ages on the clothing reviews.  JCP needs to get it's head out of it's  "....", and go back to drawing that crowd.
Jun 4, 2013 3:55PM
I just finished doing a remodel in a store that was remodeled less than 2 yrs ago. What a total waste of money, but thank them for the pay checks each week. Sorry to say the floor looks like crap, never tear out tile and go with polished concrete if there has been previous remodels, floor looks horrible and glad I didn't do it. As for their vision can't say I agree with it. I believe the same could have been accomplished with a less expensive alternative but you can't explain construction to a CEO who specialized in tech.
Jun 4, 2013 3:16PM
I think its just too far gone.  Walked into a JCP store over the weekend and just didn't recognize it.  It doesn't look like JCP at all.  Too late to save, and its a shame.  Ron Johnson killed an icon.
Jun 4, 2013 3:31PM
Always liked shopping at Penny's until one day I walked in to buy a pair of Liz Clairborne dress jeans and could not find them...I looked everywhere for the Liz Clairborne Department until I had to ask the sales clerk and she told me that they do not sell that brand anymore......oh well, they lost me as a customer......too bad
Jun 4, 2013 5:20PM

Realize middle aged moms shop there. give us back good basic clothing in allllllll sizes from 0-26 for women so I can buy for my skinny nieces and my not so skinny ones in the same place. START SENDING ME THE $10 OFF $10 COUPONS AGAIN. I always spend at least a little more although I try not to. pocket tees for the husband. and good sales are needed. so glad you got rid of the idiot who changed things that didn't need to be changed.


Jun 4, 2013 5:45PM
If they are doing a stripped-down version of Johnson's vision, they should call it "small Johnson".
Jun 4, 2013 4:32PM
Wow, he obviously did not understand the environment his company operates in.  Sad when top managers screw up a business, especially when no one speaks up (too many yes-men).  Maybe they should try consulting the people who work in the stores?
Jun 4, 2013 4:35PM
I just bought my husband some summer shorts and Kakhis and JCP. I haven't shopped there in two years because of the changes. Also, they don't carry anything that fits my type of body anymore. I can only find "tall" tank tops at Old Navy who really has the advantage of being the only place that I have found that carries them. All of the blouses and shirts are too short. I am top heavy so a lot of the material gets used up. It's funny how swim tops in xl and xxl always go first but no one seems to realize it. 
Jun 4, 2013 9:16PM
JCP was one of the most reliable consumer friendly retail stores around. I worked for them in the 70's and they treated everyone very well employees included. Go back to your roots JCP and you will be unstoppable in todays retail environment. Remember "the golden rule"... 
Jun 4, 2013 3:16PM
I hadn't shopped in JCP for years, the store layout etc didn't appeal to me.  Since revamping the store I now shop there and hope they can succeed.  Prices are good.
Jun 4, 2013 7:49PM
Buyers need to get less S- M L and more XL and XXL, sorry we are fat but it is the truth. Where are these buyers getting their info, not on the floors of the stores, must come from some computer printout.
Jun 4, 2013 7:35PM

They should take a page out of the Target book and WalMart book and Apple Store book.


WalMart has greeters--have a greeter who asks the person what s/he is looking for today and direct them to the correct location. Equip the place with iPhone options. Put up signs with in-store Q&A--they can text messages or call while they are in the store and get directed to what they want or be told how to get it.


Do the Apple thing and put sales associates in easy-to-identify clothing (a smart blazer for the managers and standard white-shirt-and-black-trousers with some kind of identifying scarf or tie for associates). Train the sales associates to help people find what they want--either in the store or in catalog kiosks (or iPads, if Johnson already bought them).


Do the Target thing and order stuff for people--Penney's already does free ship-to-store, so if they can get people ordering and shipping to the store, they might come in and impulse-buy, also. Still, this would also encourage placing large orders so as to get them shipped-to-home for free.


Do the old Penney's thing--bring back catalogs (they can be online or an iPhone or iPad app). Many people need specific stuff--uniforms (school and work), farming clothing, hunting clothing, clothing for plus-size women, shoes that are wide. All these things are easy to keep in a warehouse--and they are easy to order (Amazon has stolen this from Penney's, and it works well).


None of this is expensive--but it is all customer-oriented. Johnson was not customer-oriented (he wanted to do the Jobs thing and TELL people what they need). Just start valuing the customers you have rather than trying to remake them into the customers that you want.

Jun 4, 2013 4:29PM

I personally love J C Penny . We think they are doing a great job in all areas

Jun 4, 2013 6:42PM
Disclaimer: I'm a guy who HATES shopping, and haven't been into a mall in literally years. I wanted to get new Calvin Klein underwear at Macy's. Big disappointment even a few days labor day, selection picked apart - I had to order via Macy's online. However, I had to walk through JCP to get there, and to be honest - it looked really nice (as opposed to before). It looked like someplace to shop, instead of a weird version of walmart with clothing bins. Hip isn't word - perhaps, refreshed. And to me, that aint bad. I did buy some socks there. They definitely did not have Calvin Klein underwear for men. And guys! If you aint wearing CK nut huggers, you aint sh*t. :P
Jun 4, 2013 6:26PM
So you frumps are all mad they changed.  I am not a frump and started shopping there for the first time EVER!  The company did not give it enough time.  Can't you guys just keep shopping at Sears and Kmart
Jun 4, 2013 4:21PM
it is not important. an old has-been is going to die. it will be replaced by another store. jcp, sears, kmart and the others are not our homes or country. they never did you nor anyone else a favor. they sold you clothes and other items. in time, walmart will rot away, and yet again, another store will take its place.  
Jun 4, 2013 4:46PM
They won't make it!   Already lost their traditional family, one man, one woman, children base shortly after the board hired Johnson.  This company was founded on Christian values and adapted the homo-sexual agenda early after Johnson arrived on the scene.   There are a lot of decent people working in this company.  It's sad that they will loose their job & retirement benefits, but it's going to happen thanks to these spineless board members.
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