Benchmark Business Group

Epic Fail #2: Re-branding Gone Wrong

March 11, 2014

J.C. Penney, the once proud department store, had been wallowing in a tough economic and retail time so they made a bold move in 2011 and brought in Ron Johnson from Apple, as CEO, where he has been credited with creating the Apple Store. Given free reign to bring respectability and profitability back to the retail chain, Mr. Johnson embarked on a bold plan to re-brand and refashion both the name and the locations.  

 

Very confident in what he had proclaimed, "the department store system is broken" Mr. Johnson did what many would consider a 180 degree change from what the company had been doing. This was done without testing on a smaller scale; when asked about testing, Mr. Johnson said, "we didn't test at Apple." Doing away with most sales, coupons, and highly popular customer incentives --- sales dropped further. On April 8th, 2013 Ron Johnson was fired from J.C. Penney's; the re-branding and refashioning was an Epic Fail!

 

Following is a quote from Ron Johnson, when as CEO he had just presided over:

  • One of the worst quarters ever for J.C. Penney
  • A sales decline of 23% to 3 billion dollars
  • Same-store sales dropping by 22%
  • Internet sales falling by over 1/3, 33%, to 220 million dollars

"The first and most encouraging thing to me is I am completely convinced that our transformation is on track. We are making extraordinary progress in everything we're doing."

 

Though a positive attitude and a can-do mindset are very important in business, so is reality.  It certainly appears that Mr. Johnson, though very positive and certainly confident in his abilities and ideas, had the ability to view what universally was judged as a dismal quarter through the lens of rose colored glasses.   

 

Questions to Ponder:  

  • In what ways might you be viewing your business through rose colored glasses? 
  • Why was Johnson, who had a successful run with the Apple stores, the wrong person to lead this re-branding effort?
  • In your opinion what caused this re-branding effort to be an epic fail?

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