Before
I discuss the possible solutions to the proverbial pickle that JC Penney finds
themselves in, I’ll clearly define what problems that they are experiencing
now. Bill Ackman (hedge fund manager/CEO of Pershing Square Capital Management)
wrote a letter the rest of the J.C. Penney Board saying, “I think JC Penney is at a very critical stage in its history and its
very existence is at risk.” Continuing on, he “lost confidence” in Thomas
Engibous (Chairman), suggesting a coup involving the boardroom to kick Engibous
out, get rid of Mike Ullman (interim CEO) and reinstall Allen Questrom (former
J.C. Penney CEO) to the chairman’s seat. He also claims that Ullman has not
been acting like an interim CEO, with advisor assignments and hiring decisions
that should have been consulted with the board.
On
top of the higher-ups not getting along, the establishment is on shaky ground
as well. J.C. Penney hired a new chief of marketing from Kraft. “The market reaction was unfavorable,
however, because Debra Berman lacks retail experience.” Overall, this
nightmare seems to have only just begun, closing stocks on Friday went to a 12
year low with a 5.8% drop in value. This weekend may be a time to delay
whatever the inevitable is or just a welcome break to get a chance to breathe.
Engibous
said in a statement, ”The board is
focused on the important work of stabilizing and rejuvenating the business.”
Bold and rash moves are not going
to fix the problems that J.C. Penney seems to have made for themselves. My
impression is to go back to basics. Bring the costumers back with what J.C.
Penney is known for. Answering questions like “Who are our ideal customers?
What do they buy and what do we already have? Where are they going to buy what
they need? When is the right season to sell certain items? Why would they
choose us over the other places like us? How are we going to sway their
decision in our favor?” It’s not rocket science that when you want to sell
something, you need to fill a need, and when you need to bring a company back
from almost certain death, it would stand to reason that starting from scratch
may be the best tactic.
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