News

Is JC Penney's CEO to blame for the retailer's troubles?

October 15, 2012

JC Penney CEO Ron Johnson has been taking a lot of heat in recent months after struggling to increase profits at the 110-year-old department store.

According to an article on businessinsider.com, JCP has seen a 33 percent drop in share price and decreased sales, citing one expert that predicts sales of the chain will drop from $17 billion to $12 billion by 2013.

The article gave commentary as to why Johnson was simply the wrong man for the job:

"At JCP … Johnson (and the store's Board and shareholders) has mistaken his previous, entrepreneurial exploits and successes [at Apple and Target] as 're-inventing' retail at all levels — something he can re-engineer in his new role.

JCP represents a different challenge, however: A storied retailer with opportunities to restructure and grow, yes, but not necessarily reinvent the retail wheel.  In JCP's case, Johnson's experience serves as an impediment. JCP is, for all intents and purposes, a discount-quality department store catering to lower and lower-middle-class consumers (similar to those who frequent Sears and Walmart). To introduce concepts that worked at both Target and Apple is to miss the purchaser mark entirely."

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