Why Did Mike Ullman Decide to Change the Age-Old Culture at Jc Penney (Jcp) Just After a Successful Turnaround?

In: Business and Management

Submitted By meirachel724
Words 784
Pages 4
Why did Mike Ullman decide to change the age-old culture at JC Penney (JCP) just after a successful turnaround?

JCP was originated by a dry goods and clothing store in 1902. In 1907, Penney bought the stakes of his partners and concentrated on expanding the number of stores. The JC Penney Company was incorporated in 1924 and it had been running successfully. Until 1990s, the expansion model had started to show up problems. When competitors were going in for centralized merchandising and inventory systems, JCP was still using a decentralized system of purchasing which resulted in stretched out lead times. JCP was no longer perceived as different from its competitors. Its financials and share prices also plummeted.

Luckily, between 1999 and 2004, there was a turnaround in JCP. It was orchestrated by Castagna and Questrom, who joined JCP as COO in 1999 and as Chairman and CEO in 2000 respectively. They were the first outsiders to join JCP in their respective positions. Turnaround occurred in aspects below:

1. To centralize the buying activities and revamp the stores, funds were needed. The funds were raised through the sale of JCP’s Direct Marketing Services (DMS), which sold insurance and travel and auto club programs. It led to significant working-capital improvement.

2. JCP has also closed down 120 outlets that were not performing well. It generated an increase in free cash flow.

3. Ad campaigns were launched and the stores were given a face-lift. New designers were brought in from the competitors. JCP also dealt with apparel makers like Bisou Bisou, to exclusively sell its merchandise at JCP. It also came out with private labels like The Havanera Co., range of men’s contemporary casuals targeted at Hispanic males. JCP has made significant efforts to project a fashionable image of the company to target audience.

4. After the sale of the Eckerd…...

Similar Documents

Jcp Information

...J. C. Penney operates department stores in the United States and Puerto Rico. It sells family apparel and footwear, accessories, fine and fashion jewelry, beauty products, and home furnishings. The Plano, TX-based company also provides various services, such as styling salons, optical, portrait photography, and custom decorating. The company offers various products and services online via its website, a platform that has been the nursery for industry giants like Amazon (AMZN) and eBay (EBAY). Its direct rivals include Kohl's (KSS) and Macy's (M), among others. J.C Penney's most recent quarter results least impressive among peers The company announced December quarter results on Wednesday, February 27, an event that sent the company's shares down the charts at Wall Street. The company's sales and revenues declined shamefully by huge margins. Revenues were down 25 percent for the quarter while Internet sales dipped 34 percent. On the other hand, Macy's online business soared 48 percent and looks set to take over what J.C Penney leaves behind. Last year, J.C Penney sent home 19,000 staff, and recently trimmed its workforce by 2,200 employees as it sought to cut fixed costs following a tough campaign. Customers are losing trust in the Texas-based company despite the massive experience garnered over the years. The company did not impress in terms of market share, with fewer than 17 percent approaching the retailer's stores. Contrary to J.C Penney, Macy's Q4 results tramped......

Words: 2961 - Pages: 12

Ron Johnson Out at J.C. Penney

...Ron Johnson Out at J.C. Penney “Ron Johnson's troubled tenure as chief executive officer of J.C. Penney Co. Inc. is over and his predecessor Mike E. "Myron" Ullman 3rd is returning to the chain as CEO.” Johnson joined Penney's in November 2011 after a successful run as head of Apple Inc.'s groundbreaking retail business. Hailed at first as savior of the chain, Johnson steered a controversial course at Penney's, eliminating coupons last year and alienating customers, driving sales down 24.8 percent. The retailer lost $985 million last year as Johnson tried to reinvent the chain as a collection of specialty concepts. One of Johnson's first acts as CEO was to cut a deal to bring Martha Stewart-branded home goods to Penney's. But Macy's Inc., which already had a deal with the home goods brand, disputed the arrangement, which is now the subject of a trial in New York State court. Shares of the company shot up 5.7 percent to $16.78 in afterhours trading today as word of Johnson's departure leaked out. Activist investor William Ackman, Penney's largest shareholder, installed Johnson as CEO and gave him free reign to reinvent the firm. Ackman's was one of Johnson's loudest cheerleaders, but his support publicly began to wane last week when he said that the execution of the changes at Penney's had been "something very close to a disaster”. Ackman also noted Penney’s had seen “too much change too quickly without adequate testing” and that the execution of the reinvention “has been......

Words: 378 - Pages: 2

Mgmt591 - Research Paper – Oranizational Change at Jcpenney

...Introduction Mr. James Cash Penney Jr. was born on September 16, 1875 to the parents of James Cash Penney and Mary Frances Paxton in Caldwell County, Missouri (Elizabeth, 2010). Mr. Penney got his start in retail business on April 14, 1902 by becoming one-third partners in a New Golden Rule Store. His partners were Thomas M. Callahan and W.Guy Johnson (Elizabeth, 2010).Mr. Penney partners sold their interest in three Wyoming stores in 1907. Four years later, January 17, 1913 the J.C. Penney was incorporated. It started out with 34 stores and 20 shareholders (Elizabeth, 2010). The shareholders were store managers, former partners, Mr. Penney as the president and major shareholder. JC Penney became a public traded listed company on the New York Stock Exchange in 1927 (Encyclopedia Britannica, Inc, 2012).The headquarter is located in Plano, TX, and operates in the United States and Puerto Rico, with more than 1,100 stores and counting. JCPenney merchandises include Women’s, Kid’s, Home, Shoes, Men’s Clothing, and Bed & Bath. My role is an organization consultant. I will provide new idea to JCPenney on how they can become more profitable to consumers again. To improve sales and their image, JC Penny close their catalog business, outlet stores, exit the drug store business, and closed under-performing stores (Booten, 2011). With this reformation, many people were laid off. Problem Statement JCPenny had set the top company priority as making sales for the quarter. With......

Words: 2504 - Pages: 11

Annual Report Analysis of Jc Penney

...Annual Report Analysis of J.C. Penney Company, Incorporated Sarah Gray & Jade Vinson Hampton University Abstract This paper is going to provide an analysis of the J.C. Penny Company, Incorporated (JCP) and its financial statements. We begin by giving a background of the company and an overview of the company’s commodities for brief understanding; and then proceed to discuss the financial state of JCP. We review and analyze the company by calculating ratios necessary to conclude JCP’s current financial health. We then provide a section showing the company’s current pro forma financial statements. Next, there is a pro forma projection for the year 2020. Lastly, there will be a regression analysis comparing the stock prices of JCP to the S&P 500 Index. Keywords: ratio, projection Annual Report Analysis of J.C. Penney Company, Incorporated In 1898, James Cash Penney entered into business with Guy Johnson and Thomas Callahan for their dry goods stores called Golden Rule located in Wyoming and Colorado. The following year, Penney was sent to Wyoming to open a new store with the owners using his savings and the help of a small business loan. After the opening of the first store on April 14, 1902 he opened two more. In 1907, Johnson and Callahan ended their partnership and Penney bought full interest at all three locations. By 1912, there were 34 stores open and in the following year the company became incorporated under J.C. Penny Company and William Henry......

Words: 1280 - Pages: 6

Jcpenney

...Penney’s Real Problem: The Shrinking Middle Class * Rita McGrath April 12, 2013 Ron Johnson’s office seat has barely cooled off following his departure as business observers everywhere dissect what went so dreadfully wrong at J.C. Penney. The former Apple executive was too Silicon Valley for the Plano, Texas, retailer. He was arrogant. He didn’t test his ideas, maintaining the Apple mantra that customers don’t know what they want until you show it to them. He approved marketing campaigns that told loyal Penney’s shoppers that “you deserve to look better,” basically telling them that they looked less than glamorous wearing the brand they had trusted and been comfortable with for years. He hoarded information so that individual store merchandisers didn’t know how various lines were performing. He mocked J.C. Penney’s ways of doing things. He abandoned the discounting customers had come to expect from retailers. And he, and most of the team he recruited, were commuter leaders, jetting back to California after cramming in marathon work sessions at headquarters. These factors certainly couldn’t have helped. I think, however, there’s one major reason behind J.C. Penney’s sudden swoon that not enough commentators are picking up on. There’s one big reason JCP would never be “Bloomingdale’s for the mass market,” as Johnson wanted it to be, and that’s because the mass market is gone. Because the middle class is gone, or at least rapidly going. This reflects a troubling......

Words: 8818 - Pages: 36

History of Jc Penney and Target

...Analysis and Comparison: JC Penney (JCP) and Target (TGT) Becky Kennedy FINC 350 A Professor Mason February 1, 2015 JC Penney and Target are a huge presence in the retail industry. Both companies specialize in the sale of merchandise and service to consumers through retail stores and e-commerce. Target and JC Penney are companies that are part of an industry known for its competitiveness and few barriers to entry. They compete with other local, national and regional retailers for resources such as customers, employees, locations, merchandise, and other aspects of the retail business. Both companies have stores at several locations throughout the United States, with both company’s operating results depending on their ability to predict and respond to changes in trends and customer preferences by providing consumers with quality merchandise at competitive prices. Both companies face the same kinds of risks. The answers are in the way they are managed. The retail industry is risky with Target and JC Penney both struggling with issues resulting in lost revenue. Risks faced by companies in the retail industry most likely include competition, marketing, branding, employee/customer retention, supply chain management, financial management, data management and much more. Target suffered from a data breach at the end of 2013 that proved to be costly and they are still subject to investigations and private litigations costing them millions of dollars. JC Penney has suffered......

Words: 1109 - Pages: 5

Act 504 Jc Penny

...Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-K (Mark One) x|ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| For the fiscal year ended January 29, 2011 or ¨|TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934| For the transition period from to Commission file number 001-15274 J. C. PENNEY COMPANY, INC. (Exact name of registrant as specified in its charter) | | | Delaware| |26-0037077| (State or other jurisdiction ofincorporation or organization)| |(I.R.S. EmployerIdentification No.)| 6501 Legacy Drive, Plano, Texas 75024-3698 (Address of principal executive offices) (Zip Code) (972) 431-1000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: | | | Title of each class| |Name of each exchange on which registered| Common Stock of 50 cents par value| |New York Stock Exchange| Preferred Stock Purchase Rights| |New York Stock Exchange| Securities registered pursuant to section 12(g) of the Act: None (Title of class) Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No ¨ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes ¨ No ......

Words: 42153 - Pages: 169

Not Just a Cup of Joe: Starbucks’ a Successful Organizational Culture

...Not Just a Cup of Joe: Starbucks’ A Successful Organizational Culture The Starbucks story began in 1971 in Seattle’s Pike Place Market, selling high-quality dark-roasted coffee in small batches. The bean roaster and retail store was originally started by three partners, Jerry Baldwin, Zev Siegel, and Gordon Bowker. The three later sold the company to Howard Schultz in 1987. Howard Schultz had a strategy and a vision for the company that established its as one of the major corporate success stories of the late 20th century. The vision of founder Howard Schultz was inspired by Italian coffee bars/beverage retailer. Having experienced the espresso and coffeehouse culture of Italy, he envisioned developing and evolving a similar coffeehouse culture in the United States. He wanted to build a environment a brand that would create relationships. Our Starbucks Mission Statement: “to inspire and nurture the human spirit – one person, one cup, and one neighborhood at a time” (Starbucks, Our Heritage). Starbucks believes that communicating culture, values, and best practices through its people and being connected to community and the environment will insure the a successful organizational culture. A successful organizational culture is based on adaptability, involvement, clear vision, and consistency. Starbucks has each of these attributes and implements them in every aspect of its relationship model. Preliminary research shows that organizational Warner 2 culture is related to...

Words: 763 - Pages: 4

Jc Penney

...J C Penney Company, Inc. is an apparel and home-furnishing retailer (JC Penney Company, Inc., 2014). The Company is dedicated to being a preferred retail location for unparalleled attractive, quality, and value at approximately 1,100 stores and at jcp.com (Penney, 2013) . Customers have discovered an inspiring shopping environment that includes a collection of private and exclusive brands along with many new and exciting attractions (Penney, 2013). More than a century ago, James Cash Penney founded the company as an active and responsible community member thus earning a distinctive place amongst American families (Penney, 2013). Mr. Penney opened the first store and practiced many courtesies that are now commonplace (Columbia Business School, 2001). Practices such as money-back returns, uniform pricing, quality merchandise, and pleasant customer service set the store apart from the competition (Columbia Business School, 2001). By investing in the business and remaining committed helped build the company’s legacy. This mode of corporate citizenship continues to contribute to the advancement of social, environmental, and ethical standards (Penney, 2013). In fact, adherence to high ethical standards is an integral part of the organization’s legacy and is vital to shareholders, customers, and suppliers (Penney, 2013). The author will evaluate the changes of J C Penney’s management style, explain the shift from a catalog-based retailer, and discuss the decision to use......

Words: 1633 - Pages: 7

How Much Did Castles Change in the Middle Ages and Why

...Introduction Castles first came to England in 1066 when William, Duke of Normandy, won the battle of Hastings. The Normans needed castles because they had taken control of England by force and were hated by many English people. The Normans had to protect themselves from English rebellions and they needed to keep power over and show strength to the English people. William made sure that castles were built all over England in major towns. The first castles were built very quickly and were very simple, but during the reign of William and throughout the rest of the Middle Ages (1066-1500) the design of castles changed. In this essay I will talk about how much castles changed during the Middle Ages and the reasons for this. Motte & Bailey Castles (1066 – 1078) The first castles to be built in England by the Normans were called Motte & Bailey castles. They had: • The Keep – a wooden tower used when under attack and for soldiers to keep lookout. • A Motte - a large mound of earth that the Keep was built on. • A Bailey – a large yard that sat next to the Motte, attached to the Motte by a wooden bridge. • A Palisade – a wooden fence all around the Bailey with a ditch around the outside. • Wooden gateway - the entrance to the castle with a wooden bridge over the ditch. Norman soldiers lived in wooden buildings in the Bailey. Motte & Bailey castles were made of earth and wood, which was easy to find, and they could be built really quickly, in 7-21 days. The......

Words: 1596 - Pages: 7

Jc Penneys

...Matt Gerstenkorn J.C. Penney Exercise Dr. Robert H. Ross Marketing J.C. Penney Exercise Small and midsize businesses play an important role in our economy. Every day, they fight for our attention while also trying to gain any leverage they can over the big box retailers like Amazon, Target, Wal-mart, and more. There’s no doubt that social media is playing a crucial role in this battle. So the question is, how could J.C. Penney's even attempt to keep up with these massive retailers through social media? The impact of social media on a company's bottom line is tough to quantify, with no hard data on how millions of Facebook fans translate into sales for stores. But during the holiday shopping season, a roughly two-month period when retailers can make up to 40 percent of their annual revenue, stores are uncovering a valuable use for all the seemingly useless online muttering: market research. I believe J.C. Penney's could most utilize the like button. When people press the "like" button, they are giving their seal of approval for a particular company's page which could also lead to people commenting on how much they like the leather boots they just bought. Those are the people that are helping everyone from independently owned small shops to the nation's biggest retailers make decisions about what products to stock up on, what to play up on the sales floor and what promotions to offer online. The way that J.C. Penney's could utilize twitter is by using the common......

Words: 503 - Pages: 3

Jc Penney Strategic Marketing Plan 2012: Product Strategy

...JC PENNEY STRATEGIC MARKETING PLAN 2012: PRODUCT STRATEGY A Paper Submitted to the Graduate Faculty of the North Dakota State University of Agriculture and Applied Science By Alisha Liane Ostlund In Partial Fulfillment for the Degree of MASTER OF SCIENCE Major Department: Apparel, Design, and Hospitality Management April 2012 Fargo, North Dakota North Dakota State University Graduate School Title JC Penney Strategic Marketing Plan 2012: Product Strategy By Alisha Liane Ostlund The Supervisory Committee certifies that this disquisition complies with North Dakota State University’s regulations and meets the accepted standards for the degree of MASTER OF SCIENCE SUPERVISORY COMMITTEE: Linda Manikowske Chair Holly Bastow-Shoop Jaeha Lee Gerry Macintosh Approved: 04-24-2012 Date Holly Bastow-Shoop Department Chair ABSTRACT The JCPenney Company has undergone a transition from a value retailer to a streamlined, customer-driven retailer in order to set itself apart from its biggest competitors, Macy’s and Kohl’s. Previously, JCP was focused on general, storewide promotions. Currently, JCP has retooled their image to reflect a standard set of prices and special savings. In this exploratory look at JCP’s merchandising strategy, both previous and new methods are examined and additional steps to improve the returns on merchandising investments are offered. During this study, a detailed examination of JCP’s internal and external environments has been conducted, and an......

Words: 11736 - Pages: 47

Jc Penney

...TermPaperWarehouse.com - Free Term Papers, Essays and Research Documents The Research Paper Factory JoinSearchBrowseSaved Papers Home Page » Business and Management Jc Penney In: Business and Management Jc Penney 1. I feel J.C. Penney’s strategy is to do with away constant “sales” and have every day lower prices. I also feel that Penney’s will favor the promotion of brand names and doing away with in-house labels. 2. Yes I think Penney’s has a good strategy for growth. The new CEO Ron Johnson is providing direction and encouraging new ideas. By using the “apple” model for Penney’s he is incorporating new ideas. Mr. Johnson is trying to develop a competitive advantage by changing the way Penney’s does business. His ideas are innovative and are being responsive to customers. Finally by offering brand names he is promoting quality over cheaper in-house labels. 3. Ron Johnson has established the mission and vision with his vision on how Penney’s needs to change to become competitive. He has established the grand strategy by assessing Penney’s current performance and lays out the game plan on how the mission will be accomplished. Mr. Johnson has clearly formulated his strategy by analyzing Penney’s internal problems along with the problems they have are facing from their competitors. Penney’s is currently n the strategy implementation part of the process this will take much investment but cost cutting and the elimination of sales......

Words: 526 - Pages: 3

Jc Penney

...Author Note: This paper was prepared for Managing Organizational Change HRM 410 Table of Contents Introduction 3 Background 5 Reason for Change and Change Diagnosis 6 The Success in Change 7 The Undoing of the Successful Change 8 References 11 Introduction JC Penney was a thriving retailer business that played on consumer’s emotions and made a consumer feel proud of themselves. JC Penney as a retailer created a buzz about themselves with their pricing strategy and coupons that they offered to their consumers. Consumers often discuss the sales and the great price of a sale of items amongst themselves. This was definitely a strength for this retailer. JC Penney was also a great place to shop for big and tall in a concrete building and store, not a catalog that was another appeal to their consumers. J.C. Penney was using a decentralized system of purchasing merchandise and inventory while other companies began to use centralize systems. To centralize the buying activities and revamp the stores, funds were needed. Funds were raised through the sale of JCP’s Direct Marketing Services, which sold insurance and travel and auto club programs. It led to a significant improvement of cash flow. The company then began to close down 120 of outlet stores that were under performing and sold its interest Eckerd drugstore chain to improve an influx of cash flow. J. C. Penney lost its edge over its competitor and started to lose money in the 1990’s and their......

Words: 2601 - Pages: 11

Jc Penney Versus Harley

...Composition By Kelli Schroeder I chose JC Penny and Harley Davidson as my two companies to research for this assignment. JC Penney was founded in 1902 with the opening of its first stores along the west coast in small mining towns. It was popular because it brought goods at “one fair price” and also led the way to bring east coast fashions to the west. In 1963 JC Penney mailed the first catalogs out to customers in eight states and paved the way for the mail order business. What made this company strong, fashion at a fair price, was lost among the plethora of items from cookware to scarves that they now sold by mail, and later in stores. ("International directory of," 199) The early nineties brought struggles of competition with lower end stores like Wal-Mart and midrange stores such as Kohl’s. JC Penney found their merchandise had become diverse like Wal-Mart; however, their prices were higher like their competing boutique stores. Product value was perceived by consumers to be suffering. Profits for the more than 1200 stores fell two percent in only one year, leading JC Penney in have the worst performance of its peers in 2011. (Clifford, 2012) Harley Davidson has also struggled with the same issue of losing itself amongst fierce competition and diversification. Harley-Davidson began in a shed in 1903 by two brothers who set out to make the best American made motorcycles that money could buy. As Harley-Davidson became more successful, management decided to......

Words: 956 - Pages: 4

keyboard_arrow_up | Lace Bodycon Waisted Bowknot Midi Dress | Doll & Em