It was no surprise to read the headline posted above earlier today, (I have written several blog posts about why JC Penney was making serious brand mistakes). After several failed attempts to revamp mid-market retailer JC Penney, it was painfully obvious that the company's board needed to cut the blood letting as soon as possible. Business was down 25% last year.
What went wrong? Johnson, a notable former Apple exec, was picked to bring retail savvy from the technology company to a tired old department store brand. The problem is trying to up-market a lower end retailer whose sales were driven by price (and big sales/discounts/coupons) has historically not worked (for anybody). WalMart tried this approach a few years ago trying to out up-market Target and it also failed miserably.
Although re-branding an entity can be done, the approach used for JC Penney that tried to eliminate its brand essence and its positioning as a price point retailer was failed from the get go. Penney's customer is price driven all the way and not interested in complicated pricing strategies (there were numerous strategies used that easily confused the regular consumer) as introduced under Johnson in an attempt to get people off sales and coupons.
Its ad campaigns looked like Target knock-offs as did the catalogues and newspaper free-standing brochures they produced.
Unless the brand had something in its bag of tricks that would re-birth JC Penney without alienating and confusing its core buyers, any new strategy that made customers sense that prices were going up and that the store was moving more towards being Macys or a boutique operation was doomed to fail.
I actually think the board waited too long to make this decision and should have cut the cord after one season since the reasoning behind the pricing strategy was flawed from the beginning and trying to make JC Penney the "Apple" of department store retailing was never going to work.
Watching out for you everyday.