About Robin Lewis

Note that the crow sitting on my shoulder is not yet on a plate waiting to be eaten. That’s because I’m trying to remember all the reasons for which I should be eating crow, and when I identify all of them, how I might gracefully go about eating all of it.

But before I get into that, I must inform all of my readers who may have been living on another planet, that the subject here is perhaps the most colossal, dramatic, tragic, transparent, rapid and microscopically tracked meltdown in the history of retailing. That being the current saga of JC Penney, along with its producer, director and leading man: Ron Johnson.

I say meltdown because JC Penney is not yet dead (Johnson isn’t either, but regardless, the vultures are picking away at him with glee). In fact, I’m still confident (and hopeful) that one of the biggest reasons for which many of you believe I should be eating crow, is my continuing and steadfast belief in Johnson’s ultimate vision: that of a transformed, uniquely-compelling shopping experience, appealing to a more contemporary-minded consumer who would form a new customer base, perhaps a smaller, yet more productive business, but nevertheless poised for growth vs. maturity.

As I’ve stated before, based on my tour of the mock-up store and some of the real conversions made in other doors, the major component of his vision was off to a good start. Anecdotally, Joe Mimran, CEO of Joe Fresh, commented to me just two weeks out from the Joe Fresh “shops” launch in about 700 doors, that he was surprised at how sales far exceeded their expectations. So, of all the parts of Johnson’s strategy that Mike Ullman will be picking through to determine what is salvageable, my hope is that he and/or his successor will continue to implement that transformation. And, by the way, Ullman, in my opinion is absolutely the right person to come back to the helm during this period of operational disruption and disarray, with financials about to go over the cliff. He will stabilize the business, its culture and will hopefully determine a path to return to positive financial stability.

So, I really won’t have to eat crow over the major part of Johnson’s change-agent strategy until it’s either, played out and proven a failure, or unless Mike Ullman decides it is no longer a viable transformation or a repositioning that will succeed. On second thought, if Ullman decides to kill it, I guess I won’t have to eat crow at all because we’ll never know if it would have succeeded, once fully rolled out.

One Potential Meal of Crow: The One That Brought it all Down

There is one major reason for which I may decide to eat a taste of crow. And Ron Johnson may very well have already eaten several whole birds. And that would be me buying into his pricing strategy, both the way in which he devised it (and without research), but more importantly, the timing. I doubled down on his bet that consumers were ready to be weaned, cold turkey, off of their addiction to coupons, sales and discounting in general. By the way, it reminds me of that movie, “Reefer Madness” (circa 1936).

Anyway, the fact that he chose to lead with “fair and square” pricing, before any noticeable physical changes in the stores; before establishing contemporized new brands and merchandise; essentially before a whole new JCP and its array of experiences could be clearly witnessed by consumers; in my opinion, this was the single most catastrophic component of his overall strategy. This single act, sent his customers packing, spending $4 billion of JCP’s top line elsewhere and contributing to its $1 billion operating loss (along with the other capital and reorganizational expenses), for Johnson’s first year into the transformation.

While he acknowledged his mistake, too little was done too late to reverse the avalanche of sales losses that just kept building. Tragically, in my opinion, this was the major mistake that brought the financial condition of the company to the brink, and threw Johnson over the edge.

Had he not opened with his cold-turkey pricing scheme, and simply proceeded with the physical transformation, customers may have been somewhat disrupted by the construction and changes taking place. Some may have been put off, but not in droves. Some of the older customers may have ultimately been turned off by some of the new, more contemporary brands. But, as the total experience, including the merchandise, evolved over time, new, younger “family” customers would have been attracted, replacing the aging segment of the old JCP core. And as I said, the new transformed space (probably with fewer doors), would be more productive as some of the early “shop” comparisons proved. Furthermore, this added experiential value for consumers would justify some variation of his “fair and square” pricing strategy. And, yes, they would have been poised for growth.

Would Ron Johnson still have a job if the numbers had not tumbled with such ferocity, along with the relentless beating from Wall Street and the media day-in and day-out?

Well, according to the authors of most of the post-mortem articles, blogs and broadcasts, who keep digging up all of the negative residue they can find about Ron Johnson’s character (including hubris), management style, lack of CEO experience, snap decision-making without testing or experienced counsel, and many other questionable strategic and tactical missteps, one could believe there are a multitude of reasons other than Johnson’s pricing strategy that would have eventually led to his demise.

We’ll never know. But, I will stick my neck out once again, (for which I will not have to eat crow), and just repeat what we all do know. Money talks and that’s why Bill Ackman and the Board finally “walked.”

At the end of the day, and Ron Johnson’s last day at JC Penney, it was the pricing that brought it all down.

And at the end of my day, this is what I will eat crow over. And for all of those “I told you so’s” in my over-stuffed inbox, I will savor it and will eat it gracefully, while I hope for Johnson’s successor to continue transforming JC Penney into an innovative store for our times with an eye to the future.