J.C. Penney Ousts CEO Ron Johnson after 25% Drop in Sales in First Year
J.C. Penney Co. has ousted Ron Johnson after only a 17-month stint as company CEO. The Wall Street Journal reports that the former Apple chief executive’s overhaul of the company’s stores has led to a 25% drop in sales in his first year for a loss of $4.3 billion in revenue.
J.C. Penney’s board, which met on Monday, decided to bring back Myron Ullman to resume his former position as CEO. Both investors and those working within the company have grown impatient with Johnson’s overhaul, which left Penney’s burning through cash and losing customers.
Though Johnson arrived at Penney’s in 2011 to great fanfare, he ultimately lost the confidence of the board and investors once he put forward his aggressive plan to “reinvent” Penney’s stores without testing out the changes first. Without hesitation, Johnson refurbished stores and introduced new lines of merchandise; at the same time, he cut back clearance sales and coupon offers, staples of Penney’s customer base of bargain hunters.
The decision to drop clearance sales and coupons was also accompanied by the choice last May and June to feature a lesbian and gay couple and their respective children for Mother’s Day and Father’s Day catalog ads. The ad followed Penney’s hiring of lesbian Ellen DeGeneres to be the company spokesperson.
The attempts to main-stream gay issues drew the ire of One Million Moms (OMM), a division of the American Family Association, who launched a boycott campaign against Penney’s.
“By jumping on the pro-gay bandwagon, J.C. Penney is attempting to gain a new target market and in the process will lose customers with traditional values that have been faithful to them over all these years,” OMM wrote on its website.
ABC News reported that, in response to OMM’s concerns, J.C. Penney sent an email response:
We want to be a store for all Americans. In celebration of Mother’s Day, we’re proud that our May book honors women from diverse backgrounds who all share the heartwarming experience of motherhood.