James Cash Penney is rolling over

I have a long history with the JC Penney department store chain. I worked for my dad while growing up at his small department store just down the street from Penneys.
I knew the manager, and his daughter who was a classmate of mine. I always knew that Penneys was a fair chain, and over the years I have traded with them.
So it saddens me deeply to see what is happening to this venerable name.
I think that the problems with Penneys are a microcosm of what is wrong with corporate America, and a portend of the future, unless people wake up.
If you have followed the story, you know that the board hired Ron Johnson in 2011. Johnson came up with the concept of the Genius Bar at the Apple Store, and also had served as a vice president at Target. He came in and immediately tried to emulate the Target formula at Penneys. There were massive layoffs at both the corporate and store level, losing years of valuable experience. In addition, brands were added that were not the norm at JCP.
Add to that, a controversy over Martha Stewart Living products that has Macy’s fuming. (You can read about that here in this New York Times article. (You can read about that here in this New York Times article. )
Customer service was effectively eliminated and customer loyalty has gone out the door.
Amazingly the board has not acted, and the brand is in danger of vanishing like Montgomery Wards.
So what is wrong?
Very simple.
If you look at the members of the board at JCP (and at other corporations) you will see primarily financial experts. You won’t find people who understand the business. The board is only concerned with making shareholders money.
Now that is not a bad thing.
The problem is that the board does not understand the history of Penneys. They don’t understand the clientele. They don’t understand the corporate structure that has survived for over a hundred years.
Therefore they have hired a guy to reinvent the store and gear it to a different customer that has no intention of setting foot in JCP.
And they don’t get it.
These are all multimillionaires that shop in rarefied zip codes. They don’t understand what the middle class is, or that there is the upper middle that shops at one store, and the lower middle that goes somewhere else.
In other words, Corporate America is out of touch with America. And you and I are paying as more and more people are losing jobs.
And there is not a damned thing we can do about it.

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