After former Apple executive Ron Johnson left JC Penney in financial shambles with a failed makeover plan, the embattled executive offered his resignation, effective immediately, as the company seeks to recover from the serious damage he did to the ages old retailer. Johnson took one of the most trusted name brands in retailing, and brought the company huge financial losses. In 2012, for example, the retail giant lost $4.3 billion dollars in sales.
What was so controversial about Johnson’s makeover of JC Penney was his plan to eliminate coupons as well as specials, and instead to move in the direction of overall low prices without being able to make consumers understand this change of marketing. This seemed to have the effect of alienating the company’s core of consumers, according to one analysis piece run over at THE WALL STREET JOURNAL. Once it became clear that his makeover plans for the company were not working and instead were only driving sales down, Johnson only sought to defend his own failed policies, instead of looking to go with a winning formula that worked. Shareholders as well as other critics only managed to become more vocal at Johnson’s failures. And just last week, one of Johnson’s biggest allies and friends in the business arena, who helped to land Johnson his job at the helm of JC Penney appeared to pull his support from Johnson as well, leaving Johnson on his own to decide his own future for the good of the company. Johnson finally saw the handwriting on the wall, and realized that he needed to leave for the good of the company.
At first, the stock value for JC Penney soared at the news that Johnson had left, but then quickly tumbled upon news that former JC Penney executive Myron “Mike” Ullman is being offered his old job back as head CEO once again. Shareholders didn’t much like that news either, and really wanted to see some seasoned executive with a good track record of corporate turnaround success run the company. Some business analysts even predict the eventual death of the JC Penney company without some drastic actions to save the old retailer.
America has seen some major retail icons like Montgomery Ward hit the scrap heap. This means that JC Penney needs a quick turnaround plan to avoid a further decline and to reverse their previous sales losses. JC Penney is a perfectly good and trusted retailer, and there is no good reason that this company cannot be better managed and made profitable. JC Penney sells quality goods, and their prices are competitive enough, but the company has lost many sales to other retailers like Walmart which has better managed to make their business message of low prices more understandable to their own core of customers and to strengthen their own market share at the expense of other retailers who have lost part of their market strength.