Apple Store Exec to Lead J.C. Penney
J.C. Penney is heading into a new era and the department store chain is turning to Ron Johnson, senior vice president of retail at Apple, to lead it.
Mr. Johnson, who took the Apple Store from its inception 11 years ago to over 300 stores today, will assume the role of chief executive officer of J.C. Penney beginning Nov. 1. He replaces Myron “Mike” Ullman, the long-time CEO of the department store chain.
Mr. Ullman said of his successor, “He is widely recognized and highly regarded in the retail industry for his creativity and innovation, his commitment to empowering employees to deliver an unparalleled customer experience, and to making stores exciting places where people love to shop.”
Before joining Apple, Mr. Johnson spent 15 years at Target where he rose to vice president of merchandising.
“It’s our job to rethink everything,” Mr. Johnson, told Bloomberg News. “Retailing’s always been about creativity; it’s about creating exciting new ways for people to shop, new products for people to purchase, new ways to do things.”
Mike Janes, chief executive of FanSnap who worked with the new Penney CEO at Apple, told Reuters, “From day one, and ever since, I have never heard Ron refer to somebody coming into the stores as anything other than a guest. When you hear him talk, you feel like you are talking to somebody who was running a Four Seasons hotel as opposed to somebody who was running retail.”
“He’s kind of the CEO from central casting,” Howard Gross, head of the retail and fashion practice at Boyden, an executive search firm, told Bloomberg. “He really does understand how to differentiate one business from another.”
Brian Sozzi, a research analyst at Wall Street Strategies, said Mr. Johnson’s experience at Apple and Target would help in trying to reposition Penney.
“They are trying to become a cheap chic retailer and not just the ‘mom’ brand,” Mr. Sozzi told Reuters.
- J. C. Penney Company Names Ron Johnson as Its Next Chief Executive Officer, Effective November 1 – J.C. Penney Company, Inc./PRNewswire via COMTEX
- J.C. Penney Nabbing Johnson From Apple Sets ‘Huge Expectation’ – Bloomberg News
- Penney snags Apple retail executive as next CEO – Reuters
- Penney Picks Boss From Apple – The Wall Street Journal
Discussion Questions
Discussion Questions: What will Ron Johnson’s hiring mean for J.C. Penney? What will it mean for the department store channel?
It’s a positive note for Penney but it remains to be seen what Johnson can do for the brand. His past success has been built on the back of successful monster brands and enhancing a proven winner doesn’t leverage the same skill set required to revive an also-ran brand.
Well, on one level you don’t want to anoint the king before he’s even fought one battle, but I can only see good things coming out of this.
Target = most innovative mass merchant in the US (maybe in the world, but I wanted to be conservative).
Apple = completely transformative ‘specialty store’ experience.
Department stores = a model for the early 20th century, sorely in need of a make-over.
I would say if this guy can’t do it, no one can.
We all know that most department stores are very difficult to shop, with very few synergies between departments. There are some who have proposed just turning them into “bazaars”–all stores within a store. I’ve never liked that idea. Kohl’s has come the closest to reinventing the model until now.
I’m excited about the possibilities.
For the apparel retailer, the buying decision is made in the fitting room. Will Mr. Johnson bring his in-store experience prowess that far into the store? I hope so. I can see it now; the J.C. Penney ‘Smart Fitting Room!’ Love it!
Mr. Johnson had the advantage (at Apple) of creating a store experience from scratch while working with a tightly edited, innovative, single-brand assortment. He will face a more complex challenge at JCP, especially because the company’s over assortment and lackluster positioning need to be addressed first in order to transform the store experience. No amount of re-engineering can disguise gaps in product development.
Is the traditional department store concept ripe for reinvention? Absolutely…and Ron Johnson is a great hire to make it happen. Is it going to be easy? Absolutely not…JCP has missed a golden opportunity (with the demise of May Department Stores) to become THE moderate, promotional alternative to Macy’s while a more innovative store operator (Kohl’s) has actually bypassed Penney in annual sales.
Ron Johnson’s first and most important task has nothing to do with retail. The most crucial thing to do first is get J.C. Penney to stop thinking like a department store. In fact, he needs to help them forget everything they think they already know about retail. He needs to declare open season on sacred cows. Only once this happens, will any tactical efforts gain traction.
JCP bringing in Ron Johnson recognizes that the company wants to move forward into the contemporary world. Mr. Johnson’s challenges rest not only with the competition and the moving marketplace but with JCP’s culture and infrastructure. But he should make a strong impact.
Comparing Apple to J.C. Penney is like comparing a golden “Apple” and an ordinary green bean. If Ron Johnson is truly an expert at creating differentiation then he will have his work cut out at J.C. Penney.
I normally don’t respond more than once, but I felt obligated to say, in JCP’s defense, the company appears to have one of the most open-to-change cultures I’ve seen in the department store world. Kohl’s might be the only and biggest exception.
This might be the most important announcement in the industry–and from Penney’s, especially–in generations. I know that takes the announcement to the extreme; but if there is a company in need of a makeover, it is Penney’s. Mr. Johnson comes from a background of success. He understands customer service. Penney’s lately has not been making the cash register go “kaching.” This is a man who knows the value of a customer and will bring that mindset to Penney’s. They can sure use him. I can’t help but think of the “king’s ransom” they must have paid to get him.
Nothing short of BOLD will work for JCP. They came from a service background but devolved into employees recommending customers “wait for the sale” or give them the additional coupon. You need the right people on the floor–something Ron knows well. Checkout the WSJ article today on their fanatical training. That’s much easier when your margins are 80+% on an average ticket of a grand.
Ron Johnson certainly has a new challenge. Taking a department store that has many existing locations and employees as well as a strong culture and loyal customers to a whole new shopping experience is a daunting task. If rethinking everything is the beginning premise, watching the evolution will provide topics for many more discussions.
While I have a great deal of admiration Ron Johnson and his accomplishments at Apple, the challenges he faces at J.C. Penney will be quite different. At Apple he was able to invent the business. At J.C. Penney he will need to deal with a company that is far less innovative and far more steeped in historical structure.
Hiring Mr. Johnson to run J.C. Penney is likely to be one of the best decisions made by that company in years. He is a first-class retail executive with great experience and insights into what it takes to serve and sell to today’s consumers.
My initial thought was that this sounded rather desperate (i.e. “let’s go out and hire someone from a highly successful retailer, whether it has any applicability to us or not”); but after reading his bio–and particularly his experience at Target–it seems more conventional. The general perception seems to be that he has his work cut out for him…I wish him well.
This hiring will push J.C. Penney into the next level. JCP needs to move into the 21st century and a customer-centric, technology sensitive executive like Ron Johnson is just the person to do this. There will be many dead bodies along the way, but JCP will require a revolution to bring itself into the retailing forefront, while changing the perception of department stores everywhere.
Change agents work when the board supports the changes. The rank and file need to know they must change, down to their performance evaluations and compensation reviews. All need to understand that “hurry slowly this too shall pass” will not be tolerated. Otherwise, Mr. Johnson will end up on the trash heap of failed promising executives brought in for yet another retailer turnaround.
Or as we like to say, “retail ain’t for sissies.”
JCP is already aggressive in multi-channel shopping. it will be interesting to see how Johnson evolves the model to not only remake the department store, but make it a true cross-channel experience.