Since taking over as CEO of the J C Penney retail group in the US Ron Johnson has been a man under pressure. His reputation, built on launching the hugely successful Apple Stores is being severely tested in an effort to – in effect – relaunch a well established mid-level high street retail group.
Thus far Johnson has not been able to revitalise the business which, linked to cut-backs and lay-offs, has seen support and enthusiasm from both staff and customers alike plunge sharply. Penney's is a mid-level retail brand in the US, a sector that is suffering from the retail downturn.
He may have bought the extra time he needs with a $248 million sale of Penney's stake in the Simon Property Group. The first step in divesting the company of non-core activities while, at the same time upgrading its rather dowdy image and profit sapping discounts. The plan is to convert floor space into dedicated shops and boutigues centred around a particular brand or theme.
Johnson's plan is supported by many industry analysist. The problem is, will he have the time to get it established whilst sales are fast sliding donwards?
Last month Johnson's new team lost Michael Francis, who resigned as company President.
In May same-store sales during the first three months of the new pricing model fell 18.9 percent: far worse-than-expected. The company also posted a large net loss and cut its dividend.
If the conventional 'bricks and mortar' retail outlets have a future this is a story worthy of following.