Putting aside the small fact that Ron Johnson’s reign at J.C. Penney nearly bankrupted the department store and sent its long-loyal shoppers into the arms of other retailers—the ousted CEO says J.C. Penney would have been better off sticking to his plan.
Just as a reminder, that plan entailed a near complete J.C. Penney overhaul (that was never tested on consumers prior), forgoing frequent sales and coupons in favor of everyday low prices and trying to turn the store into a hip boutique of sorts where coffee and juice bars would sub in for cash registers and payments would be made on mobile.
Needless to say, it was a colossal failure for the company that resulted in tanked sales, loss of longstanding shoppers and landed Johnson out of a job after only 17 months at the helm.
Speaking at a ShopTalk conference in Las Vegas Monday, Ron Johnson said that the company’s stagnant ways were what gave rise to its failure.
“When I got to Penney’s, I had no choice because I was told people wanted change, but the truth is nobody wanted change,” Fortune reported Johnson as saying.
During Johnson’s tenure, his efforts at change fueled a decline in annual sales from $17 billion to roughly $11 billion, 40,000 axed jobs, plummeting shares and fears that Penney’s would fold after what was then 110 years. Penney’s rehired Mike Ullman, whom it had let go in seeking the Ron Johnson dream for reinvention, to calm the waters and then Marvin Ellison took over last August.
J.C. Penney said Friday its total sales were down 1.6% in the first quarter to $2.8 billion, and that losses narrowed from $150 million to $68 million. The company also said it would shift from an apparel-heavy merchandise mix to one that favors things consumers are spending more of their money on, like experiences, entertainment and household décor.
Johnson admitted at the ShopTalk chat that he moved too quickly with his ideas, but maintained that Penney’s should have stuck to his strategy.
“I still think if we had continued on, the company would have been a lot better than this painful U-turn where they’re trying to find new growth from a new baseline,” Fortune reported Johnson as saying.
But Johnson has moved on from his mistakes at Penney’s. Since he was sent packing in 2013, Johnson got involved with women’s e-tailer Nasty Gal and launched a full-service e-commerce shopping concept called Enjoy, that lets consumers shop for high-end electronics and have them hand-delivered by an expert who helps with set up.