Old/new JCPenney CEO Mike Ullman keeps reaching backward into his pre-2012 bag of tricks for things that will revive the brand that he ran, then lost, and is now running again in the post-Ron Johnson era. But unfortunately, he hasn’t yet been able to reach back to a time when the company still made money: Still smarting from the damage done during Johnson’s tenure, JCPenney reported a worse-than-expected loss of nearly $350 million for the first quarter on Thursday afternoon.
Ullman had told investors to anticipate about a 16 percent drop in sales for the fiscal first quarter from a year ago, when Johnson was just putting his “reforms” into place. But the bottom line for the just-concluded period was much worse that analysts had expected, a loss amounting to $1.58 a share when the consensus forecast called for a loss of just 43 cents a share.
“Our objective is to put JC Penney back on a path to profitable growth,” Ullman said in a press release, according to USA Today. “We are looking forward, not back, and undertaking initiatives to ensure that we have a successful future.”[more]
Ullman has already tried to move forward by turning back to JCPenney’s past in a number of ways, including restoring traditional sales and coupons to the JCPenney stores as well as by bringing back the $1 billion private-label brand that Johnson canned, St. John’s Bay—which customers persuaded the chain to dust off.
Now, Ullman is taking a similar approach to the much-changed JCPenney logo. A fourth version of the marque in as many years has been evidenced in new advertising communications that the brand is using to attempt to lure back shoppers who defected during Johnson’s “transformational” tenure.
The new design departs significantly from the existing logo, “jcp” in lower-case letters, and stuffed into the upper-left corner of a box in a red-white-and-blue design launched by Johnson last year. The fresh logo retains all-lower case but returns to a font very similar to the one JCPenney used for many years.
In the meantime, Ullman is becoming more and more ensconced perhaps as the permanent replacement for his replacement, despite the disappointing first-quarter results. The board recruited him back after it ousted Johnson to restore some sense of steadying association with the historical JCPenney brand. At the time, activist investor Bill Ackman—who had recruited Johnson—insisted that Ullman would be only an interim figure as CEO. But with one decisive action after another that at least seems to have stabilized JCPenney, Ullman reportedly is gaining fans on the board for another long-term gig, while Ackman is losing clout.
“Really, you could say the struggle [between Ackman and Ullman] was mostly in Bill’s mind, because he had no leverage after Johnson left,” a source told the New York Post. The hedge-fund head “has lost all credibility as a retail genius.”
Not that Ullman yet has credibility as a retail genius. After all, the steady decline of JCPenney in his first tenure as CEO led to the board’s almost-desperate recruitment of Johnson, who had starred as the chief of Apple’s much-vaunted retail operations. Today’s earnings report underscored that Ullman’s road to redeeming JCPenney will be a long one indeed.