PLANO, Tex. — Myron “Mike” Ullman 3rd has his ear to the ground at J.C. Penney Co. Inc.
Noting at the company’s annual meeting here on Friday that he has spent a lot of time “listening” since returning to lead the struggling chain five weeks ago, Ullman cited his immediate goals as reconnecting with the customer via promotional marketing, rebuilding private brands, “fixing” the Internet business with merchandise that matches and extends what’s in the stores, and focusing on customer service.
“The retail success formula is quite simple: It’s visits and spend,” Ullman said. “We’ve suffered over the last year or so in terms of visits, partly because of the messaging, and partly because when they came they didn’t find merchandise they could relate to or the size and style to satisfy their needs.”
He expects Penney’s e-commerce site will start posting sales gains this year after losing a “significant” portion of revenue last year.
“Our store associates depend on the Internet to extend the sizes and styles, to sell something they don’t have in the store, so we are in the process of putting that back together,” he said.
Home departments debuting June 6 in 500 stores will be “the best looking” in the industry, Ullman asserted, noting the chain’s remaining 600 units will offer the same goods with a different presentation. The home stores include shops for tabletop items by Michael Graves and Jonathan Adler and paper goods by Martha Stewart.
About six weeks before Ullman’s return, the company hired a market research firm experienced with political campaigns to gauge its traction with the public, he noted. A series of three television ads — including an apology that was a hit on social media — combined with discount offers helped sales beat expectations over Mother’s Day weekend, he said.
Executives were also asked about the company’s efforts to monitor its supply chain given the recent spate of safety issues at factories.
Penney’s didn’t produce any goods in the Bangladesh factory that collapsed last month and has a policy against “multiuse” buildings that house other businesses, noted Ken Mangone, who returned to the company two weeks ago as executive vice president of product development, design and sourcing.
“Going forward, we will require structural and electrical engineering inspections in countries that have that kind of risk,” Mangone said.
Penney’s had previously added more regional compliance directors based in Bangladesh following a tragic fire in December 2010, Mangone noted.
“We participated in training for fire safety and exit, which was a problem in the 2010 fire,” he said.
About 200 people attended the meeting, all filing past an exhibit of the company’s heritage fronted by illustrations of all past chief executive officers, except Ron Johnson, who was forced out in April following his 17-month tenure of plummeting sales and profits.
The company’s entire board, which hired Johnson to remake the firm and then brought back Ullman, was reelected at the meeting.
At the onset, chairman Thomas Engibous introduced the company’s board and asked shareholders to hold their applause until the end, a request that sparked chuckles from the crowd.
The elephant in the room — the company’s nearly $1 billion loss last year on a 25 percent drop in sales — wasn’t acknowledged at the meeting, by executives or shareholders, who seemed happy to have Ullman back at the helm.
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