Can Penney’s new leadership (finally) transform the business?

Discussion
Grand reopening crowd, McAllen, TX, Sept. 2021 - Photo: JCPenney
Jan 13, 2022

Marc Rosen is pulling together a leadership team at JCPenney with a vision of doing nothing less than transforming the legacy retailer.

Penney’s CEO, who joined the company in November after serving as executive vice president and president of Levi Strauss Americas, announced the additions of Sharmeelee Bala, chief information officer (CIO), and Katie Mullen, chief digital and transformation officer (CDO), to the retailer’s c-suite.

Ms. Bala has been charged with uniting “JCPenney’s physical assets with its evolving digital footprint,” according to a press release. She joins Penney from Gap Inc., where she served in leadership roles since 2018. Ms. Bala worked in a variety of technology and executive positions at Walmart for 20 years before joining Gap.

Ms. Mullen has been charged with driving Penney’s enterprise strategy forward and actualizing its plans to transform its business to meet the needs of customers when, where and how they wish to shop. She joins Penney after nearly three years at Neiman Marcus where she was first the chief transformation officer and then CDO. Ms. Mullen was a partner and managing director at Boston Consulting prior to that.

“With a strong balance sheet and unique products and services backed by our iconic American brand, JCPenney is a destination for best-in-class talent like Sharmeelee and Katie,” said Marc Rosen, chief executive officer. “Sharmeelee and Katie will be invaluable partners as we move forward with our digital journey and transform the business through technology and innovation.”

Mr. Rosen’s ability to attract top talent is seen as one of the keys to restoring Penney from a retailer simply seeking to survive to one that thrives.

Can Penney’s new leadership (finally) transform the business?
JCPenney’s Forever 21 collection – Photo: JCPenney

The retailer recently made news on the merchandising front that it hopes will attract younger shoppers to its stores while appealing to loyal customers, adding Forever 21 merchandise to 100 stores and jcpenney.com. The chain’s owners, Simon Property Group and Brookfield Property Partners, also own part of Forever 21, along with Authentic Brands Group (ABG).

Last week, Penney and ABG debuted a new athleisure collection, Sports Illustrated for JCPenney, for men, women and children that is exclusive to the retailer. The mens and womens lines are available at all Penney’s stores. Plus-size and big & tall lines will be available at 300 of the chain’s locations, as will the kids line. The entire selection is available online.

DISCUSSION QUESTIONS: What do you make of the recent c-suite and merchandise news from JCPenney? Do you see opportunities for the chain to make some positive moves now that its balance sheet is healthy?

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Braintrust
"Turning around J.C. Penney is like turning around a battleship, no matter the reduced footprint or renewed focus on younger customers."

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27 Comments on "Can Penney’s new leadership (finally) transform the business?"


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Mark Ryski
BrainTrust

Well OK, we’ve seen this story play out many times before. You need a great team to in order to transform the business, so executive team building is the obvious first thing to do. But ultimately, the challenges remain — can this new team take a beaten and battered brand and bring it back to life? We can always be hopeful.

Neil Saunders
BrainTrust

Good appointments. Good people. Good skills. Absolutely rotten retailer. On the ground there is virtually nothing that looks good about J.C. Penney. Stores are worse than ever. Assortments are unfocused and bland. There are very few solid initiatives. With the consumer economy set to tighten, I just cannot see a path forward for J.C. Penney. That said, I wish everyone well and I hope that they prove me wrong!

Dick Seesel
BrainTrust

It’s 2022, and J.C. Penney’s main competitors (from Target to Kohl’s to Macy’s) were ramping up their digital strategies a decade ago — while J.C. Penney was stumbling under a series of management changes and bad decisions. Technically, it’s “never too late” but Penney has lost a lot of omnichannel ground while at the same time shrinking its physical footprint. (And, as panelists have noted, the Sephora loss is a big one.) Without any direct knowledge of the new talent acquisitions, it’s hard to see how long Simon will be patient with a challenging turnaround.

Dave Bruno
BrainTrust

I wish the new team well and truly hope they are successful. I also have three words of (albeit unsolicited) advice: assortment, assortment, assortment.

Cathy Hotka
BrainTrust

It’s going to take some pretty bold moves and new partnerships to turn J.C. Penney around. Kohl’s (surprisingly) showed that it can be done. Let’s see some swashbuckling!

Carol Spieckerman
BrainTrust

Things are about to get interesting at J.C. Penney and its next chapter shouldn’t be compared with traditional department store dynamics. J.C. Penney’s diverse new leadership, its plug-and-play brand portfolio alliance with Authentic Brands, and Simon and Brookfield’s retail development involvement are unprecedented. Lest we forget, J.C. Penney was one of the first (the first?) retailers to achieve a $1 billion e-commerce business. Of course, since that time, J.C. Penney has veered off in many disjointed directions. Now it has the opportunity to regroup and reclaim a better version of its former glory. Retail needs a strong middle player and I wouldn’t bet against J.C. Penney at this stage, even if it takes a village to pull it off.

Jenn McMillen
BrainTrust

Turning around J.C. Penney is like turning around a battleship, no matter the reduced footprint or renewed focus on younger customers.

Jeff Sward
BrainTrust

The relationship between J.C. Penney and SPG and ABG offers some intriguing possibilities, along with J.C. Penney’s roster of proprietary brands. So they have plenty of opportunity to differentiate themselves. But a bunch of proprietary brands hanging out on four-ways and rounders isn’t going to cut it these days, no matter how many coupons are offered. And customers don’t care about industry press releases. So let’s get a “store of the future” up and running and see what mall-based department store retailing can stand for now that we are 22 years into the new century.

Bob Phibbs
BrainTrust

Like Glen Close in Fatal Attraction, the story of J.C. Penney returns around NRF with hope. I wish them well.

David Spear
BrainTrust

Mr. Rosen and the new execs are talented, no doubt, but I’m bearish on the J.C. Penney brand and its ability to garner consumer interest. I wish them well and hope they turn this around, but I wouldn’t hold your breath.

Doug Garnett
BrainTrust
10 months 25 days ago

Sounds to me like J.C. Penney may have internalized the wrong lessons from its failures. None of these backgrounds makes me hopeful because none suggest they understand how to accept J.C. Penney for what it is today (a weak player with loyalty from a certain group of customers and an operation based on the no longer useful model of a department store) in order to move forward. J.C. Penney cannot become strong by airlifting in foreign programs – it needs to start from where it is today.

Georganne Bender
BrainTrust
I thought about this one for a while before responding. I know that the new C-level executives at J.C. Penney want to make the store shine again, want to make it relevant again, and want to be the ones who make it happen, and I wish them the best of luck. But I have to wonder about previous administrations and their attention to what does or does not happen on the sales floor. The JCP stores that I have visited in the last year are, frankly, a mess. Merchandise is on the floor, fixtures are empty, tables are strewn with product. This is what customers see; they don’t see what happens in the executive offices. I think that if anything major is going to happen with J.C. Penney it has to start on the sales floor. Every single day on RetailWire we talk about the customer experience and how important it is. You are not going to continue to attract customers to stores that look like they haven’t had any attention in years. So before… Read more »
Lee Peterson
BrainTrust

The reason you see Abercrombie or Victoria’s Secret starting to turn around is predominantly because of consumer perception of the brand, not the executives. J.C. Penney has the same issue, only in a reverse direction. Just one question: have you ever, I mean ever, heard a Millennial or Gen Zer even mention the name J.C. Penney before? Sure, they might get some pops from obvious improvements, including talent, but at the end of the day half the people in the country wouldn’t set foot in a J.C. Penney. It’s great they’re upgrading, but 25 years ago would’ve been the time for a re-do.

Ryan Mathews
BrainTrust

Clearly J.C. Penney is investing in some high powered talent, and that is always good. But they are being asked to do the near impossible – transform a moribund brand (J.C. Penney) in a declining category (traditional middle class consumer department stores). Making modifications to the existing model just won’t be enough. This is going to take a literal transformation because: a.) the stores are tired, to put it charitably; b.) malls are in trouble, again, to put it charitably; c.) the traditional target consumer is aging out/dying out; d.) previous managements have failed to transform the company enough to build up a viable, sustainable, new customer base; e.) the competition is simply very, very good. This is an impressive lineup of top retail executives and I wish them well, but color me skeptical.

Mohamed Amer, PhD
BrainTrust

Great people, talented team, inspiring vision, but time and the operational environment are not on their side. I sincerely do wish them luck. However when this latest and valiant attempt fails, it won’t be for lack of trying or skill; the deck is stacked against them.

Steve Dennis
BrainTrust

Now that Sears is, for all intents and purposes, gone, J.C. Penney is the poster child for the “collapse of the middle” that has been unfolding for the past 20 years. Trying to be a little bit of everything to a little bit of everybody with a concentration in a format that continues to contract is a losing strategy. Everything they have done (or can do) is merely kicking the can down the road. I will assume the leaders that have joined are absolutely top-notch, but the train left the station on a possible transformation many years ago. There is not enough money, nor talent, nor, most importantly, time to turn this most unremarkable retailer around. Dead brand walking.

Cathy Hotka
BrainTrust

The current situation is so depressing that they might want to rebrand….

David Slavick
BrainTrust

Steve, you are correct. There is much to be learned and has been written about with respect to Sears Holdings which I still hold near and dear to my heart.

Steve Dennis
BrainTrust

Having worked there during the ’90s, I feel I speak with a fair amount of experience.

Richard J. George, Ph.D.
BrainTrust

J.C. Penney is following the script of most struggling retailers: press releases, new management, new merchandising, etc. However the question remains, “what is J.C. Penney’s differential advantage?” Until it develops a sustainable competitive advantage, it runs the risk of winding up like Sears, “where America used to shop.” I wish them well, however.

Gary Sankary
BrainTrust

It feels like this is an annual discussion. Can the “new” team at J.C. Penney turn the ship? The fundamentals at J.C. Penney are really bad. The brand is battered and customer perception, well. Turning J.C. Penney around, I suspect, will require more capital investment than the company is actually worth. Event then, there is no real guarantee of success. I understand Simon’s focus on keeping an anchor alive for the regional centers but, honestly, I don’t have a lot of confidence that this will be a success.

Mel Kleiman
BrainTrust
Mel Kleiman
President, Humetrics
10 months 25 days ago

Make it simple — too little too late. Why would you want or need to shop at J.C. Penney’s?

RandyDandy
Guest
10 months 25 days ago
There is a place, and plenty of available spaces, for a retailer to give consumers, of many (but not all) wants, something that’s missing. Say, a more curated and less convenience-store-on-steroids idea than Target; and a more exclusive yet less pretentious experience than in a Bloomingdales. Plus, it should be technically state-of-the-art, and in the moment/experiential as far as the people (shoppers and staff) go; but not to the point of pulsating unpleasantness. Shopping should be about attraction and interesting things that are touched, not torched, with excitement. Could Penney’s be this of-the-future-but-right-now store? To put it bluntly, there’s no way in Hell. That’s because for consumers to get all these wants and needs takes building anew and completely. Not gerry-rigging something that has the taint of years of underperforming and never possessing any cache. The former you can surmount, as everyone loves an underdog story. However, the latter is something you either have or you don’t; it’s also what a business can try to “buy” even though it’s always something consumers bestow upon you.… Read more »
Craig Sundstrom
Guest

Thud, thud, thud … that sound you hear is a dead horse being beaten; but let’s go over it again: JCPenney hasn’t been “transformed,” and it’s not going to be transformed … barring something radical (like merging with Kohl’s or fellow perpetual patient Macy’s spinning off part of its operations and JCP picking them up). I’m not entirely sure what its future is … maybe the Montgomery Ward of the 21st C (the other store that lingers on for decades). I wish them well (which for now means actually being around to be “wished well”).

David Slavick
BrainTrust
What does the JCP brand stand for and why go there? At one point in time, our household always shopped the store because their boys’ jeans were the perfect fit for our teenage son. Likewise, they did a great job of promoting by seasonal floorset and incentivizing traffic with effective direct mail. I had the honor and distinction to be on a panel with a JCP exec 20 years ago who said rewards, recognition and loyalty programs don’t work at JCP. Questioned why, the answer was “we did Penney Points and the pilot failed.” So, there you go, do a pilot it fails and of course never revisit or figure out what was essentially wrong with the program construct, fix the design and go back into the market with something that will work. Remember the days of Ellen Degeneres as spokesperson touting simplified pricing…$19 and you don’t need a coupon vs. $18.99 and coupons used for every in-store purchase — oh if you don’t have one the associate will scan one for you out of… Read more »
Rachelle King
BrainTrust

If only changing the c-suite could change your brand archetype. J.C. Penney is J.C. Penney. While we always want to root for retail transformation, this retailer shares the same mental space as Sears and Kmart. They are likely on the same trajectory too, but these new pedigree hires might slow the pace. Might.

William Passodelis
Guest

Ms. Bender hit the nail on the head! CUSTOMER EXPERIENCE! Pay attention, or at least look at your sales floors. Fix that! If there is going to be a turnaround, it is going to be slow and will require continued sustained effort. It will NOT be easy. The team is talented and will need to be! There is no millennial that knows about or considers Penney for potential needs. If they are going to survive, they must become relevant. However, starting with attention to the store space itself might be a good first year effort.

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Braintrust
"Turning around J.C. Penney is like turning around a battleship, no matter the reduced footprint or renewed focus on younger customers."

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