PLANO, Tex. — J.C. Penney Co. Inc. is going to be “in the wilderness” for about a year as it reinvents its identity in a bid to capture market share, chief executive officer Ron Johnson told shareholders at the company’s annual meeting here Friday.
“We are in the middle of a very important and a very challenging year of transformation,” he told the small audience at company headquarters. “It is not easy. It’s been a really hard time for all of us here.”
Certainly Johnson is the first ceo in Penney history to appear before shareholders in a checked shirt and gray jeans, and his relaxed style indicates yet another era for the 110-year-old retailer, which has seen its shares pummeled after reporting a $163 million loss for the first quarter.
The retail maverick still talked heritage, framing the company’s fledgling everyday pricing as a return to founder James Cash Penney’s insistence on charging the “right price.” “We moved through a period where we marked our products up only to mark them down and sell them at a perceived discount,” Johnson explained in a quick review of company history.
“It’s a really popular thing with a lot of our competitors but, from my perspective and that of our leadership team, this was not a great era for our company,” he said. “We had massive losses in market share, we kind of moved into a position where there were a lot of people with similar merchandise, and during that time, especially the last two-thirds of that, our stock price did not appreciate.”
A Penney retiree pointed out during the question-and-answer period that the stock fell significantly over the last five years, and dividends were suspended even as the company doled out a hefty severance to former ceo Myron E. “Mike” Ullman 3rd, who received total compensation of $34.6 million last year, including stock and option awards.
“What did you learn from him that was worth $40-plus million?” the shareholder asked.
“Mike did an extraordinary job of educating me on the company and introducing me to people around the world,” Johnson replied. “We traveled together to Europe, to Asia, to New York multiple times. He walked me through exactly how this company works sitting through the various committee meetings and the process that we use. And I found that actually quite invaluable.”
Regarding the elimination of the firm’s quarterly dividend, Johnson acknowledged it was a “very difficult decision for shareholders,” but he insisted it was the right move.
“We really believe we have a lot of ways to use our capital to provide extraordinary growth for this company,” he said. “We’re excited about seeing appreciation of the stock price, and you can hold me and my team accountable for that.”
Penney has only about 3 percent of market share, Johnson said, so it has to break through to the 97 percent who don’t think of the retailer first.
“We’re rethinking everything,” he noted. “From a marketing perspective we’re looking at the personality of the brand, pricing strategy, promotional strategy, the products we carry, how we present merchandise and ultimately the store design itself,” he said. “For us to succeed we’ve got to be the best at all of these.”
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Known for his sleek, sophisticated American glamour, Norman Norell is the subject of an upcoming exhibition at @fitnyc. “Norell: Dean of American Fashion,” which runs from February 9 through April 14, will feature approximately 100 ensembles and accessories. His best work is exemplified by the designer’s glittering “mermaid” gowns frosted with thousands of hand-sewn sequins – like the one pictured. (📷: William Helburn) #wwdfashion
For pre-fall 2018, @balmain didn’t let go of the glitz. A crystal embroidered baseball jacket priced at around $40,000 hangs in the “couture” section of the brand’s first men’s pre-collection. Sporting the words “Balmain Army” across the back, the item took around two months to make. “When it was completed, it was like Christmas, it was like, ‘It’s done, it’s exactly what I wanted,’” said Balmain’s creative director @olivier_rousteing during a tour of the collection in a Paris showroom on Monday. #wwdfashion
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Demna Gvasalia continues to shake up the Paris fashion calendar — and experiment with new runway timetables for his @vetements_official brand. WWD has learned that Vetements plans to stage its next coed show for the fall 2018 season on January 19 during Men’s Fashion Week in the French capital. Details about the timing and venue have not been confirmed — stay tuned on WWD.com to catch the latest. #wwdnews (📷: @giovanni_giannoni_photo)
@zacposen's go-to holiday gift? Cookies! "I'll usually bake cookies and send them as a gift," said the designer, who recently released his cookbook "Cooking With Zac: Recipes from Rustic to Refined." Get the recipe for his Brown Butter-Chocolate Chip Cookies via link in bio 🍪🍪🍪 #wwdeye #cookingwithzac
For @monsemaison’s pre-fall 2018 collection, Fernando Garcia and Laura Kim honed in on the brand’s many signatures — men’s wear, which was tweaked and feminized through deconstruction, proportion play and lots of bare shoulders. See the rest of the photos on WWD.com #wwdfashion (📷: George Chinese)
On Friday night, @yohjiyamamotoofficial received the Design for Asia Lifetime Achievement Award in Hong Kong. The 75-year-old designer has been celebrated for many years and is best known for his dark and avant-garde tailoring. “In my long career, in design, architecture, [I’ve been to] so many parties, this is the very first time that I have such a warm feeling, I really appreciate this,” Yamamoto said. #wwdfashion (📷: @dominiquemaitre)