Former Apple Retail Head Ron Johnson Fired as CEO of JC Penney

[Terrin]

Hard not to based on numbers alone...

I disagree. JC Penny was already struggling, which is why they brought him in. The powers that be wanted some of the Apple and Target magic. Namely, bring in some younger cliental.

They should not have brought him in to only give him a year and a half. He essentially had to make over 1000 tired stores on limited funds. I think he did a remarkable job, and given more time he probably would of had some success.

He brought in store within a store concept, better quality merchandise, significant steps towards remodeling, and rebranding. I was in there yesterday, and some cool store within stores were in the process of being built. It was much lighter and festive looking then in the past.

JCP made a mistake getting rid of him. Sure it was bleeding money, but it already committed to the plan. A new person is going to feel a need to change things, and that will interfere with the stores identity some more.

 

[acslater017]

He did amazing stuff with Apple, but I wouldn't take him back. What kind of management morale would there be with someone who left coming back?

For someone like Ron Johnson? It would be awesome. From what I understand, Store morale is the lowest it's been in a long time, with the 1-2 departure of both Steve and Ron...There would be fireworks set off at Apple Stores everywhere with Johnson's return.

Speaking of Steve, he left, came back, and it was great.

 

[Terrin]

It was a risky job he was taking. They wanted to turn around a humdrum business and thought that would take radical change. Which is what Johnson put in motion. But neither the customers or employees went for it. So it failed. It's not really a reflection on Johnson so much as it was ultimately a bad move to go for that plan.

The real problem is the powers that be were right, it will take radical change. Ron was making those changes, but on JCP's budget, the 1000 stores were slowly in various stages of being transformed. Eventually, a new identity would be established.

You can't ask for a miracle, and only give the miracle worker less than two years. Apple took longer to plan for its first store then Ron had at JCP.

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I kind of get that, but Net Income is the main determining factor for a company. That's the bottom line - how much profit it made.

You are right, but that wasn't always the case. The whole profit is everything is a recent development of the last thirty years or so. Profit has always been important, but many companies used to care about other things as well.

 

[JoeIsInTheCloud]

JC Penny is a stale old brand that needs reinvention. Ron Johnson outlined in the 2012 company report a four (4) year plan. The board bought it. Then they turned around, dropped a load in their pants, and turned on Johnson. Why? Shortsighted "investors" that haven't a clue what it takes to steer a sinking steamship into port to be repaired.

JC Penny has cancer. Ron Johnson offered chemo. Board agreed, then expected two weeks of antibiotics as cure while idiotic sales associates -- that don't know J. Crew from J. Pierpont Morgan -- complained about the taste of the medicine.

Screw 'em, Ronny. You're too good for them.

 

[iGrip]

I hope Google doesn't hire him and start building retail stores.

SAMSUNG!!!!!!!

 

[Rogifan]

And THAT is the mark of an EXCELLENT CEO. the CEO doesn't make one single item, or all one single item... They HIRE the best people they can to do that.

Funny how so many who worship Steve can't stand Tim Cook and think Apple couldn't innovate it's way out of a paper bag right now. Yet it was Steve who decided Cook should replace him.

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SAMSUNG!!!!!!!

So I guess Best Buy will be hiring him then?

 

[StrudelTurnover]

He did amazing stuff with Apple, but I wouldn't take him back. What kind of management morale would there be with someone who left coming back?

That seems to happen all the time, actually. Especially in tech. It depends greatly on why people leave. Between tech, mine engineering, and academia I can count at least 8 people I personally know who have left a supervisor-level job, sometimes by switching companies, sometimes by voluntary leave, and still come back.

 

[macus3r]

I think people like to be associated with shopping at certain luxury department stores that generally carry a higher price point. See, its a psychological thing... In other words:

"omg Liz I got these new shoes at the bloomies big brown sale, you have to go!!!!"

And the scene at these department stores? Have you ever seen a woman turn into a predator? If not, would you like to? Have a look at just about any women's shoes dept during a sale or holidays. It's like they're out for blood.

So yea, with every day low prices there's no conveying of that "I got a deal" feel to a friend. Naturally we all like to brag at some point. Girls are obviously no exception and clothes are pretty much the main thing about them. The discounting factor creates this feeling of elation and happiness (probably something having to do with the body's neurochemical or hormone processing system I'd imagine)

And if you so much as answered someone with "I got it at JCP" I'm sure they'd be like "oh... Cool!" Or something to that effect, basically ew you shop there?

I mean ****, even Macy's looks better than Jcp right now and that's not saying much.

Sorry RoJo some things you just can't fix. Great try though, very bold moves if not stupid at times. But he tried and you can't take that away from him!!

He's gotta get his hands on the reins again at apple. For Steve.

Source: years spent working in luxury retail

 

[iGrip]

remind me why did he leave Apple?

He is disloyal.

 

[wovel]

Firing a CEO in less than 5 years, unless he rapes a baby or something equally horrific, is the sign of a bad board, not a bad CEO.

 

[wovel]

Under the prior CEO (Ullman - who is returning) JCP had its *most profitable year ever* with 1 billion in profit, in 2010. Throughout the financial crisis of 2007-2009, the company was *profitable every single year*. We gave out a dividend *every single quarter*. That does not describe a company that was on the ropes.

Not sure what your looking at, but your statement is simply not true. Even if you play the accounting games that made it look like their most profitable year, it was still only 1/2 billion dollars. You can't count the adjusted number if you want to look at how the company is performing.

Actual profits in 2010 were 378 million (almost half of what they were in 2008, but slightly up from the disastrous 2009). Profits in 2007 were 1.105 billion. In 2006? 1.134 billion. So in Ullman's last 4 years, company profits dropped ~66% or ~$750 million. Are you sure he was doing a good job?

His first two years were ok (he was hired in 2004), but his 4 can't be described as anything but a complete train wreck. How much of the first two was really him.

Penny's board is incompetent. They fire their new CEO for not stopping Ullman's train wreck fast enough and then replace him with the guy he crashed it in the first place.

 

[Apple Corps]

Funny how so many who worship Steve can't stand Tim Cook and think Apple couldn't innovate it's way out of a paper bag right now. Yet it was Steve who decided Cook should replace him.


So what is your point? Steve made some hiring mistakes - John Sculley being the worst.

I don't see anyone "worshiping" Steve - that is a premise you are trying to no so subtly sell. Steve took Apple from an idea to a company, from near ruin to the world's most capitalized / most admired / most innovative / most .... in Act 2.

Cook is in over his head and dropping the ball as demonstrated by a 40% loss in market cap under his growing tenure in the ceo role & growing list of problems.

 

[macs4nw]

He did amazing stuff with Apple, but I wouldn't take him back. What kind of management morale would there be with someone who left coming back?

Although by all accounts, Ron did an amazing job at APPLE, I agree with those who say that it wouldn't be that smart for him to come back to APPLE. For starters, he'd be burdened with unrealistic expectations of performing continued 'Magic' for his former employer (APPLE).

Also, there are so many other good companies out there who could use his talents, and where he'd be a better fit than at JC Penney, and that would be more of a redemption for him than to try to live up to unattainable expectations at APPLE.

 

[oysteins]

Well I wasn't expecting that. How could the man who did such great things for apple retail do so badly at jcp that he's out not long after he started?

I guess these are two totally different worlds of products, customers, pricing and ambitions. It is easy to say that one wants real customer satisfaction (JCP) but when it come to the real world, you have to be as non-spreadsheet and crazy as SJ. Please come back, Ron, and finish what you started together with SJ.

 

[JoeG4]

JC Penney sells clothing for the poor. Seriously go to Macy's to get quality clothing.

You can find just about every brand JCPenney sells at Macy's, but Macy's carries other stuff as well.

As I said last time, perception is the problem with JCPenney. When you're dealing with mall shopping, the brand has to be one that people will feel good carrying around the mall with their shopping bags and feel good about being seen shopping there.

When I go to the mall I often check out all of the stores, especially if I'm looking for something in particular, but JCPenney is really hurting in the variety now.

 

[blackburn]

well, it looks like Ron squeezed... (puts on sunglasses) ...his last penny. YYYYYYYYYYEEEEEEEAAAAAAAAHHHHHHHHHHHHHHHHHH!!!

You just made me login to up vote this

 

[cmChimera]

Quote:
Originally Posted by anthony11
Yeah look at all the fallout from that Jobs guy doing just that.





The company didn't almost go bankrupt because of the departure of Ron Johnson. ie. Steve Jobs

What's your point? The comparison wasn't made to say that they left Apple with similar circumstances, but that a guy that left the company and comes back isn't going to destroy the company.

 

[dru`]

Well I wasn't expecting that. How could the man who did such great things for apple retail do so badly at jcp that he's out not long after he started?

he was a terrible fit for JCP. i don't know if the damage done trying to make JCP into the Apple of dept stores can be repaired.

 

[SkippyThorson]

For someone like Ron Johnson? It would be awesome. From what I understand, Store morale is the lowest it's been in a long time, with the 1-2 departure of both Steve and Ron...There would be fireworks set off at Apple Stores everywhere with Johnson's return.

Speaking of Steve, he left, came back, and it was great.

Firing a CEO in less than 5 years, unless he rapes a baby or something equally horrific, is the sign of a bad board, not a bad CEO.

These are two of the truest statements I've heard in a long time. Investors are VERY shortsighted. They have no idea what it takes to repair a store, a business or a brand from years of mismanagement. I've seen JCP make the transition from disgusting to light, clean, organized and cheerful since Ron became CEO.

I knew he would do a fantastic job, but it was clear the mess was bigger than anyone anticipated - and the board of directors is almost completely to blame. They're going to run JCP in to the ground with the next few CEOs, and then they'll start the shutting down process a handfull of stores at a time. It won't be soon, but it will happen.

Right around the same time, Sears / KMart will fall. Talk about disgusting stores. Ever set foot in a KMart?/

Shame, really. I thought JCP was on the right track. The Fair And Square concept is a great idea, but they took it overboard. No sales? Who does JCP sell the majority of clothing to? Women. Who LIVES for weekend sales in the paper? Women. What did they think would happen by eliminating weekly sales? The store-in-a-store idea seemed to be working well.

I was excited to hear Ron taking over as CEO. I would have invested in JCP had they given him time to execute the plan. Now? Never. They're going to get someone else in and completely undo any good that Ron did.

JC Penney sells clothing for the poor. Seriously go to Macy's to get quality clothing.

Seriously, stop speaking. Everything you say spews idiocy. Heck, at least you finally left the Marketplace, though.

 

[dru`]

Actual profits in 2010 were 378 million (almost half of what they were in 2008, but slightly up from the disastrous 2009). Profits in 2007 were 1.105 billion. In 2006? 1.134 billion. So in Ullman's last 4 years, company profits dropped ~66% or ~$750 million. Are you sure he was doing a good job?

Of course nothing happened in the consumer economy that would effect retails during that time frame.

 

[John.B]

I really liked what he did with JCP. Especially their pricing structure. With avoiding the constant sale craze you always knew you were getting their "bottom dollar" (things were still discounted to close out stock on occasion". This not only was a reassure for the consumer but it also allowed for less in store labor as less employees were required to change prices all the time.

But many people will take advantage of that sale and actually pull the trigger on the merchandise during the discount time frame. When it's always the "bottom dollar" price, for a lot of people there is no incentive to buy *today* instead of next week or next month.

I'm not saying I like the pricing model, but in this culture it seems to work for a lot of retailers.

 

[charlituna]

You can't ask for a miracle, and only give the miracle worker less than two years. Apple took longer to plan for its first store then Ron had at JCP.

Basically. It's not a shock given that most companies live by their stock value. The Board got scared because of the movement of the prices. They were probably feeling some burn from bigger name investors as well

T funny part is that when they said they were bringing back the old CEO the value they gained by firing Johnson went down. Guess not everyone can pull that move from Apple

 

[Irishman]

The problem Ron faced was that making JCP a cool place to shop didn't take into account that their base of customers are mostly not cool. I'm guessing JCP would have seen continued weak sales numbers had they done nothing at all and turning around a retailer with such a bad history is almost impossible - just look at Sears and Kmart.

I say JCP deserves to fail for the years of horridly run stores and bogus "sales' tactics. Johnson simply needs to find a new "cool" brand he can help take to the next level in the same way he did with Apple. Forget legacy stores - they're either doing the right thing or they're not and won't regardless of who is in charge.

Too bad Best Buy isn't targeting him to pick up.

THEY could use some cool now!

 

[Chupa Chupa]

Under the prior CEO (Ullman - who is returning) JCP had its *most profitable year ever* with 1 billion in profit, in 2010. Throughout the financial crisis of 2007-2009, the company was *profitable every single year*. We gave out a dividend *every single quarter*. That does not describe a company that was on the ropes.

I wrote my post last night. This A.M.'s Wall St. Journal said pretty much the same thing... that JCP is a dying company & damaged brand. Even the old CEO coming back is quoted as saying JCP can't revert to the way it operated in the past. If you want to drink the JCP Kool-Aid go ahead, but to consumers JCP stands for Junk, Crap, and Pitiful. In fact JCP has moved out of most of its mid-end urban mall locations for less expensive space in low end malls and Hickvilles.

 

[charlituna]

Cook is in over his head and dropping the ball as demonstrated by a 40% loss in market cap under his growing tenure in the ceo role & growing list of problems.

That loss is more from bs talk by so called experts and analysts, unfounded rumor mongering etc than anything Tim Cook has done or not done. Only real mistake Cook has made was trusting when Scott Forstall said iOS 6 was release ready. Or perhaps not firing him months sooner if he is the giant donkey butt the rumors claim