Roulston Retail Partner Dick Seesel on JCPenney: End of the Johnson Era, or End of Story?

The end of Ron Johnson’s tenure at JCPenney came with unexpected speed this week. (In my case, it happened just before I taught a class of retailing management students about “retail pricing,” and I had a wealth of extra talking points to use.) It’s only been a few days since his firing — and the rehiring of his predecessor Mike Ullman — so here is my immediate reaction:

Mr. Ackman’s vote of “no confidence” last week signaled that the crisis of operating results at JCP showed no signs of improvement. His fellow board members appeared extraordinarily passive during the past 18 months of Ron Johnson’s stewardship. Selecting Mike Ullman to step in appears at first glance to be an attempt to stop the bleeding and save the company, not another stab at “reinvention.”

You can make a case that JCP stores and assortments look crisper and more updated than before, but it’s hard to know whether the new shops (e.g. Joe Fresh) are gaining any traction. But Mr. Ullman (or his eventual successor) has a big task in front of him, starting with the need to drive sales volume. As I’ve pointed out repeatedly, the collapse of JCP’s sales in the last year made the rest of the operating model (margins and profits) unsustainable.

Whether Mike Ullman is the right man for the urgent job ahead of him remains to be seen. He is likely to bring some needed stability to the organization (and the vendor community) but did not move JCP forward during his last tenure as CEO. In the meantime, Ron Johnson’s short stint at JCP should provide cautionary lessons about the need to test new strategies and the dangers of a passive board being steered by an “activist” member. To read the full posting visit Dick’s blog at http://retailinginfocus.wordpress.com/.

Dick Seesel is the Manager and owner of Retailing In Focus, LLC. He was most recently a Senior Vice President and Divisional Merchandise Manager at Kohl’s Department Stores. Dick is proud to have helped Kohl’s grow from 18 stores to a national retail powerhouse, during an era of change and consolidation throughout the retail industry. During his 24 years at Kohl’s, Dick managed the Women’s Accessory, Jewelry, Cosmetics and Intimate Apparel businesses. Prior to Kohl’s, Dick worked for Dayton’s Department Stores and his family’s retail business.