J.C. Penney’s Overhaul
Former Apple retailing executive Ron Johnson, who recently took over as CEO of J.C. Penney, has launched an aggressive plan to completely change the way his department store does business. This strategy will differentiate it from many, if not most, of its competitors. We will follow this transformation closely to see which parts succeed and which parts fail.
Now three months into his job, the new chief executive is hoping to turn things around with a far-reaching but risky overhaul of the department store format in an effort to lure consumers back to a chain that’s often criticized as dowdy.
Mr. Johnson, who won plaudits for reinventing the retail experience with Apple stores’ clean lines and empty space, laid out an ambitious plan Wednesday that involves carving stores into a warren of specialty shops, turning the high-traffic center selling space into an entertainment and hang-out area, and eschewing constant “sales” in favor of lower prices every day. The idea is to make stores more inviting, highlight brand names and gain more control over pricing.
“Some may call it crazy, but I don’t think there is an alternative,” Mr. Johnson said in an interview. “In an Internet age where you can have exactly what you want with one keyword, people won’t tolerate big stores. You have to break it down for them.”