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JCP CEO

It comes as no surprise if you’ve been following the travails of JCPenney, but the man who decided customers should do without coupons and sales is now without a job. CEO Ron Johnson was ousted as JCPenney CEO today. Adding a bit of insult to injury, he’ll be replaced by the former CEO whom he himself replaced – as though his year and a half tenure never happened.

But then it will be awfully tough to pretend Johnson’s tenure never happened. The company has lost billions during Johnson’s turnaround plan, which involved refreshing the chain’s stores and their product selection. But most famously, his plan did away with coupons and sales in favor of “Fair and Square” pricing, a variation of Walmart’s “everyday low prices” approach.

But JCPenney is no Walmart. And Ron Johnson is no Sam Walton, Walmart’s famously successful founder.

The plan seemed to make sense as Johnson described it in January of 2012. “As a customer you’ve got to be wondering, how do I know when the right time to buy is? It’s pretty confusing.” So he decided to streamline pricing, and do away with near constant sales and coupons.

But the plan alienated customers who had grown accustomed to coupons and sales, and it didn’t do much to attract any new customers to the stores. It didn’t take long for customers and analysts alike to declare Johnson’s ideas a disaster. But he continued to urge everyone to stay the course, even as sales continued to plummet.

“One of the big mistakes was perhaps too much change too quickly without adequate testing on what the impact would be,” JCPenney investor and board member William Ackman, who recruited Johnson for the job, said last week. “There have been some big mistakes” in Johnson’s tenure, he added, concluding that “the impact has been, on a consolidated basis, very close to a disaster.”

Considering his strategy was to make things less confusing, things just got more confusing for a time, as Johnson began to backtrack. As the company relented and started bringing back sales and coupons, Johnson stuck with his corporate doublespeak line of calling them “gifts” and insisting they weren’t coupons at all.

But now, coupons, sales and the old CEO are back. The old CEO, that is, whom Johnson had criticized for presiding over a company that had “590 unique promotions” in 2011. It may have sounded crazy to Johnson, but perhaps customers just liked it that way.

“While jcpenney has faced a difficult period,” once and future CEO Mike Ullman said in a statement today, “its legacy as a leader in American retailing is an asset that can be built upon and leveraged. To that end, my plan is to immediately engage with the Company’s customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the Board to develop and clearly articulate a game plan to establish a foundation for future success.”

As for the old CEO, “we would like to thank Ron Johnson for his contributions while at jcpenney and wish him the best in his future endeavors.”

Just hope that his “future endeavors” don’t lead him to a store where you like using coupons.

Image source: JCPenney

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2 Comments

  1. Pingback: Blow Up The Brand | jacoBLOG

  2. Just another one of those genius CEO’s who are certain that his customers are blithering idiots just waiting to be led around by the nose.

    I will never understand why companies who hate their customers seem so surprised when customers object to bad treatment. Think: The Post Office.

    (& you just know that this fellow is still convinced that it wasn’t HIS plan that was the problem….someone ELSE was to blame.)

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