For those who thought the Ron Johnson era at J.C. Penney(JCP) was long over, a reminder this week that the results of his disastrous 17 month tenure continue to linger. Johnson was fired in 2013, but, despite strides under new CEO Marvin Ellison, the company remains a shadow of what it was prior to Johnson’s tenure. Incredibly, Johnson still believes that his strategy was correct and the company should have continued to pursue it. This week, the company finally settled its five year long litigation with Macy’s(M).
J.C. Penney Finally Settles Ron Johnson-era Macy’s Lawsuit
Macy’s sued J.C. Penney over Johnson’s deal to sell Martha Stewart-branded home products in violation of Martha Stewart’s exclusive deal with Macy’s. An embarrassing public trial followed which resulted in a June 2014 decision against J.C. Penney. Yet, apparently it took another three years for a settlement. Perhaps this was cleanup by Macy’s CEO Terry Lundgren before his imminent retirement. Either way, it is best for these two struggling companies to finally have this litigation behind them.
Retailers struggle to chart a path for the future
Johnson’s failure at J.C. Penney has not stopped other struggling retailers from aiming to reinvent themselves. Sears(SHLD), which is famously struggling as sales continue to plummet, has attempted to become an online and membership-based retailer, with little success. Macy’s itself has struggled of late. Target(TGT), another former employer of Johnson, just killed two ambitious innovation efforts before they ever saw the light of day. Even Amazon(AMZN) has been experimenting with brick and mortar. What will the future of brick and mortar retail look like? Ironically, it may not be too far off from Johnson’s vision, but it will take a measured, careful approach to execution unlike the bet the farm now approach that he presided over.
Disclosure: The author owns shares of JCP