With Apple in His Head, New CEO Tosses Out Old Pricing Models and Formats at Department Store
By DANA MATTIOLI - The Wall Street Journal
Shortly after taking the top job at J.C. Penney Co. last fall, Chief Executive Ron Johnson signed up for the company's email alerts. He was shocked by what landed in his inbox.
The former Apple Inc. retail executive was deluged by sales announcements, sometimes two a day. He and his team counted 590 separate sales last year. They didn't bring in shoppers—Mr. Johnson's team found the average customer purchased only four times a year—but they did crush prices. Alarmingly, he learned nearly three-quarters of Penney's products sold at discounts of 50% or more.
"I thought to myself, 'This is desperation,'" Mr. Johnson said.
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.
