After more than a year of new initiatives gone wrong, CEO Ron Johnson is leaving J.C. Penney.
He came to the 100-year-old-plus company from Apple with big ideas that were as radical to the retail world in 2012 as the iPhone was to the masses pre-June 2007. A sampling of them, at random: replace by 2014 bar codes with RFID tags so customers can swipe their own merchandise, create dozens of in-store boutiques connected by "streets," ditch coupons and promotions for everyday-low price points, and pepper stores with food offerings, such as gelato and coffee stands.
One of the biggest blows came last month when it was announced that same-store sales plummeted nearly 32 percent in the fourth quarter, and a net loss of $552 million (or $2.51 per share) was reported for the quarter. Internet sales were $315 million, a 34.4 percent drop from the same time last year.
Despite the financial losses, J.C. Penney is blossoming on the fashion front with recent high-profile collaborations with designers such as Nanette Lepore, Duro Olowu and dress line Marchesa. It also was recently announced that the store will launch later this month a jewelry bar featuring designs by top accessories designers, including Kara Ross, Kenneth Jay Lane and Diego Massimo.
Read more below from Bloomberg News about the dismissal and Mr. Johnson's replacement ...
J.C. Penney Co. ousted Chief Executive Officer Ron Johnson and reinstated his predecessor, Myron E. Ullman III, as the department-store chain works to rebound from declining sales.
The changes are effective immediately, the Plano, Texas- based company said today in a statement.
The departure comes after a dismal first year on the job for Johnson, who arrived at J.C. Penney with great fanfare after building Apple Inc.’s network of stores. Johnson has been trying to transform most of the company’s stores into collections of boutiques and removing sales and coupons in a shift to everyday low prices.
The strategy failed to catch on, with sales in the year ending Feb. 2, plunging 25 percent to $13 billion, the lowest since at least 1987. Ullman served as J.C. Penney’s chairman and CEO for about seven years before Johnson took over.
J.C. Penney rose 1.4 percent to $16.09 at 5:22 p.m. in New York and earlier climbed as much as 13 percent after CNBC reported Johnson’s departure. The shares had dropped 50 percent from Nov. 1, 2011, the day Johnson started, through the close of regular trading today.
(Photo: Ron Johnson speaks to reporters in front of the central glass staircase in the Apple store on Boylston Street in Boston. Josh Reynolds/Associated Press)