Marc Rosen, CEO of JCPenney. At the retailer’s Stonebriar Center in Frisco, Texas. Photo by Nancy Newberry from Fortune
good morning. luck Senior Writer Phil Wahba is here.
How much corporate revitalization is when the CEO decides to let the plan take root by being good at the basics of the company instead of trying to dazzle everyone with flashy moves. It’s amazing how much traction you can get.Take a JC penny. In the decade leading up to filing for bankruptcy protection in 2020, department store reinvention after reinvention did nothing to stop years of declining sales and eroding market share.
Remember when Ron Johnson of Apple fame tried to make Penny cool with a more sophisticated brand and ditched coupons? ), even though the core shopper was a suburban mother.
In a column published this morning, JC Penney CEO Marc Rosen explained his new plan and why he thinks it will finally work. Rosen, who spent years at Levi Strauss and Walmart before joining Penny as CEO in 2021, says that unless he has a firm foundation in the basics like having the latest electronic money, any restructuring plan will be a cool influencer. No collaboration, nor a new beauty brand, can work for Penny. Meet customer demand and build supply chain and data analytics capabilities to keep shelves stocked.
“In the past, I’ve seen companies chase glowing objects to find a ‘big bang’ solution,” he told me. “This time, I’m saying we have to fix the foundation.”
The same philosophy works wonders at other companies. In retail, we’re seeing bookstore Barnes & Noble thriving again by focusing on selling books rather than selling trinkets or creating e-readers. Target taught us the same lesson at a major turning point in 2017.
Of course, it helps Rosen that Penny is privately held. So while he tends to fix the basics, he doesn’t have to deal with the possible pressure of Wall Street and activist investors.
There are first signs that Mr. Rosen’s turnaround is paying off. Simon Property, one of his owners at Penney Co., said last month that despite his group facing a slowdown in consumer spending in his two main categories of apparel and home goods, Penney Co. “It’s incredibly profitable,” he said. Penny generated nearly $9 billion in sales last year and operates 665 stores, about half the size it was a decade ago. But Rosen said business is now stable.
Some of Rosen’s repair jobs have convinced employees who have gone through countless layoffs and years of declining sales. When Rosen took over as his CEO, he met with as many store-level employees and middle management as he could to boost morale and help Penney finally come up with a convincing plan and ensure that they were needed. We set out to reassure employees that “One of the really nice surprises is the strength of our culture. We have a really dedicated team,” says Rosen.
You can read the full text here.
Phil Waba
phil.wahba@fortune.com
@filwaba
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This issue of CEO Daily was edited by Jackson Fordyce.
