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J.C. Penney CEO Johnson Is Forced Out

Apr 9, 2013
Originally published on April 9, 2013 9:14 am

Transcript

DAVID GREENE, HOST:

NPR's business news starts with J.C. Penney's revolving door.

(SOUNDBITE OF MUSIC)

GREENE: J.C. Penney has ousted its high-profile CEO, Ron Johnson. The retailer recruited Johnson from Apple, to revitalize the company. But since his arrival less than 18 months ago, things at J.C. Penney have only gotten worse.

Here's NPR's Wendy Kaufman.

WENDY KAUFMAN, BYLINE: Ron Johnson had headed up Apple's retail operations, and arrived at J.C. Penney with lots of fanfare and big ideas for turning things around. Unfortunately, they didn't work.

RAFI MOHAMMED: The root of Ron's demise was simply, he was too ambitious.

KAUFMAN: Rafi Mohammed is a retail pricing strategist.

MOHAMMED: First, he tried to wean customers off of coupons, off of discounts. And second, he was trying to make a dramatic change in the merchandise that simply took too long and as a result, old customers stopped coming, and new customers never had a chance to come in the door.

KAUFMAN: Johnson hadn't followed the usual industry practice of testing changes in a small number of stores before adopting them company-wide.As customers quit shopping, sales tumbled. In the most recent quarter, they were down roughly 30 percent from a year earlier, and the quarterly loss was a staggering $522 million.

One big investor and J.C. Penney board member, who had been a big supporter of Ron Johnson, said last week, the turnaround had been very close to a disaster. J.C. Penny has brought back Johnson's predecessor, Myron Ullman, to once again lead the struggling retailer.

Wendy Kaufman, NPR News. Transcript provided by NPR, Copyright NPR.