Tuesday, June 18, 2013
The Dallas Morning News
DALLAS - Last year, Ron Johnson left one of the most celebrated posts in business to accept one of the hardest jobs in retail.
J.C. Penney CEO Ron Johnson, shown in April, says running the show takes “a lot of courage. You’ve got to be able to have a few arrows shot in your back.” Sales declined 20 percent through the recent quarter.
Eve Edelheit/Dallas Morning News/MCT
The brains behind the boldly different Apple store, Johnson left Cupertino, Calif., for Plano, Texas, to reinvent the struggling J.C. Penney Co.
He didn't need the job. By his early 50s, he was reportedly worth hundreds of millions, thanks to stock options driven by Apple's success.
But at Apple, the Stanford- and Harvard-educated Johnson operated in obscurity under the shadow of larger-than-life founder Steve Jobs. At Penney, Johnson would run his own show, win or lose.
Before Apple, he was at Target, where he earned credit for distinguishing the discounter from its competitors by working with designers to create cheap but chic goods. That experience was why the design-centric Jobs hired him to launch Apple's retail stores.
Jobs, who died last year of cancer, is still a role model for Johnson, who has been candid about Jobs' influence on his leadership style.
In late January, Johnson, a Minnesota native who has spent much of his adult life in California, unveiled his vision for the new Penney with more than 700 analysts, financial and fashion reporters, and vendors. He stood on a New York stage with a blue sky backdrop behind him. It was reminiscent of one of Jobs' famous product unveilings. And from that day, Johnson wasted no time beginning to transform the 110-year-old company.
He built his team. He fired thousands of store and headquarters staffers. He dropped brands and began signing on others. Store remodeling began.
Johnson's vision is to transform Penney from a traditional department store to a specialty store made up of a collection of 100 shops and category boutiques along streets with a town square in the middle.
He has likened it to a mall inside a mall. Wide aisles create the streets, where there are places to sit, check email or have a snack.
He radically simplified pricing. And he introduced technology that will allow for mobile checkouts and even self-checkout with the use of RFID tags on merchandise.
Early results have been ugly. Sales declined 20 percent through the most recent quarter, which ended in July. Internet sales fell more than 30 percent in the second quarter.
Critics have been vocal. Some call him delusional.
Many CEOs would duck the publicity and adopt a low profile during this phase of the transformation. But Johnson has stayed front and center, preaching patience and reminding critics that Apple reported similarly awful numbers in the early 2000s. He notes that others seem to have forgotten that.
He hasn't shied away from Wall Street, meeting in person instead of on conference calls for quarterly reviews. He talks regularly with the press and even went on CNN's "Piers Morgan Tonight" show late last month.
He points out that Jobs was famous for pushing his vision when others didn't see it.
And August sales were "encouraging," although actual numbers haven't been released.
Johnson likes talking about his vision for Penney, but not about himself. He decided not to be interviewed for this report.
When syndicated comic strip Dilbert featured Penney's pricing message woes on Aug. 24, chief merchant Liz Sweney didn't hesitate to walk into Johnson's office with it. "He laughed," she said.
Some staffers say Johnson has his "own brand of sunshine" and they trust in his will to succeed, his positive attitude and his honesty.
He has an approachable personality down to his casual dress code.
He's persuasive when he talks about his vision for Penney. Even after the disappointing second-quarter report in August, he drove the stock price up while talking with media and analysts about the future.
(Continued on page 2)