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.
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.
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!!!
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.
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.
I personally love J C Penny . We think they are doing a great job in all areas
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[BRIEFING.COM] Equity indices closed out the month of August on a modestly higher note. The Russell 2000 (+0.6%) and Nasdaq Composite (+0.5%) finished ahead of the S&P 500 (+0.3%), which extended its August gain to 3.8%. Blue chips lagged with the Dow Jones Industrial Average (+0.1%) spending the bulk of the session in the red.
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