Citation
The 5 Big Mistakes That Led to Ron Johnson's Ouster at JC Penney
TL;DR
Eliminated 590 annual sales events, customers stopped coming
This post-mortem analysis of JCPenney's failed retail transformation provides critical lessons about phototropism failure modes. Ron Johnson correctly detected a real gradient (experiential retail) but destroyed $6B in market value by applying it to the wrong customer base.
The analysis demonstrates that gradient detection is necessary but not sufficient - companies must also verify that their customers will follow them to new positions. Not every gradient is for every company.
Key Findings from Business (2013)
- Eliminated 590 annual sales events, customers stopped coming
- Q4 2012 same-store sales dropped 32%
- Annual sales fell from $17B (2011) to $11.9B (2013)
- Early warning signals in Q1 2012 were ignored