JCP CEO Ron Johnson Changes Direction – Again
Let the Sales Begin
The biggest sale at JCPenney has been the 55% drop in the stock price since January 2012 when new CEO Ron Johnson rolled out an everyday low price strategy by eliminating sale events. In announcing that the floundering department store will resume discounting, Johnson confessed that the company's core customer “enjoyed coupons much more than I understood.”
Johnson took over the reins at JCPenney over a year ago after notable success at Target and in launching Apple's retail stores. The dramatic shift from discounting to Johnson's “Fair and Square” pricing underwhelmed the market, and JCP's cutting edge advertising didn't improve customer traffic. If anything these moves drove away and turned off the traditional value seeking apparel customers that had made up Penney's customer base.
We've written several blogs following JCPenney since the new strategy was rolled out. See below:
There is a story about a pet food company that created and brought to market a new dog food. After a year of intense marketing, the CEO bemoaned the fact that sales were abysmally low. He could not understand how this massive effort was such a failure. They just couldn't sell this dog food. Finally, an honest employee told the CEO, “The dog's hate it!”
No matter how bold, how innovative, and how appealing JCPenney's new direction was; no matter how much was written about Johnson's past success; the JCPenney customer just hated the new approach.
The question now is will JCPenney be able to recover? Your thoughts?