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.”
“Azzedine has been one of the biggest influences in my life. He has always been such a strong, loving, fatherly figure to me. I call him Papa. His designs are indescribably unique, they are pieces of art. He knew how to make the female form look its loveliest. I have so many memories of him; my favorite might be during my first show with him in Paris. He liked me and he wanted to help me get more work. He called all his friends at Kenzo and Comme des Garcons, and asked them to book me. They said, ‘But she can’t walk!’ And he said, ‘but she has such a great ass!' His friendship and support has been the great privilege of my career. I can't imagine life without him. Repose en paix mon Papa.” - @stephanieseymour tells @wwd. #wwdfashion (📷: @steveeichner) #alaia #azzedinealaia
Azzedine Alaïa, flanked by two of his closest friends, models Stephanie Seymour and Naomi Campbell.
He designed Seymour’s dress for her 1995 wedding to Peter Brant, and treated Campbell (who famously called him Papa), like a daughter. For more on the legendary designer, tap the link in bio. #wwdfashion #alaia #azzedinealaia
Azzedine Alaïa's “I-did-it-my-way” ethos stood out starkly at a time when brands are experimenting with consumer-facing fashion shows, coed formats and trans-seasonal collections – anything to perk up lackluster sales of ready-to-wear in an age of Insta-everything. “It’s not creation anymore. This becomes a purely industrial approach,” the late designer told WWD in an interview last year. “But anyway, the rhythm of collections is so stupid. It’s unsustainable. There are too many collections.” Read more about the iconic designer’s life and work on wwd.com, link in bio. #wwdfashion #azzedinealaia (📷: @WWD Archive, 1986) #alaia
Sneaker reselling app @goat’s latest exhibit, "The Greatest: New York," tells the story of New York's sneaker culture. To celebrate the exhibit, an intimate crowd gathered on Thursday night at the pop-up gallery space, located at Platform in Culver City, to hear guest speaker and illustrator @esymai talk about her own rise in streetwear and women in the business. "For me I'm just someone who is creative. I like to create things," said Chang. #wwdfashion
Azzedine Alaïa, one of the most iconic couturiers of the modern era whose body-con designs defined Eighties fashion, has died in Paris. The diminutive Tunisian-born designer, known for his structured knitted dresses with fitted waists and impeccably cut, figure-hugging second skin silhouettes was deeply admired by his peers, and counted supermodel Naomi Campbell - his adoptive daughter - among his inner circle, one of a gang of glamazons including Farida Khelfa, Carla Bruni and Stephanie Seymour who became ambassadors of his style. (📷: Alexandre Guirkinger) #wwdblast