March 28, 2013
JC Penney is one of only a handful of one hundred year old plus companies in the United States. Founded in 1902 by James Cash Penney, the company has grown into a major retailer, with 1,104 stores and approximately 116,000 employees as of February 2013. The company sells merchandise and services through its department stores and website, jcp.com. Their product mix includes clothing and shoes, accessories, jewelry, home furnishings and beauty products. In addition, they provide services such as styling salons and portrait studios.
James Cash Penney founded the company on the Golden Rule; treat others the way you want to be treated. That strategy worked well for them over the years as indicated by several financial milestones, including their first $1 billion sales year in 1951, their first $1 billion catalog sales year in 1979, and their first $1 billion online sales year in 2005. JC Penney weathered the storm through many major crises, including World Wars I and II and the Great Depression. They benefited from the enormous population growth and spending power of the American middle class, their core customers. Over the years the company expanded into the drug store, insurance and banking business.
Recently, though, JC Penney has suffered. The recent great recession hit them rather hard and their sales and profits suffered. In order to regain market share and redefine the company the Board of Directors brought aboard Ron Johnson, head of Apple’s retail stores and former Target executive. Johnson was tasked with rebranding the 110 year old retailer and making it more competitive against their rivals such as Kohl’s, Macy’s, and Target. Johnson’s strategies were focused on an ambitious goal; to make JC Penney America’s favorite store.
In January 2012 Johnson introduced a bold new business plan to transform and reinvent JC Penney. This four-year plan called for new pricing