DALLAS -- J.C. Penney CEO Ron Johnson, who built Apple's retail business, verbally invoked his old boss, the late Steve Jobs, and gave a virtuoso, hourlong performance in bluejeans Wednesday before investors, Wall Street analysts and the media, leading them through prototypes of the company's revamped "stores within a store."
Johnson insisted he could deliver the same kind of magic that made the Apple retail outlets a resounding success. On the opening of Apple's first store, Jobs left thinking it was a failure. But he came back at Johnson's urging and ended up standing eight hours to watch Manhattanites snap up the company's electronic wares.J.C. Penneys of the future will be a collection of 100 different stores, boutiques and refreshment kiosks along with children's play areas and iPad stations, laid out along wider aisles known as "streets" generating from a "square" where school kids will get free back-to-school haircuts or sit on Santa's lap.And after the gradual buildup of "The Shops at jcpenney" in 700 outlets nationwide with boutiques like Levi's, Joe Fresh, Giggles Disney, Liz Claiborne and exclusive brands like Sephora, JCP and Cosmopolitan, Johnson promised a 25 percent annual turnover in such stores to keep the concept fresh for consumers. He said that's 21/2 times faster than store change in a typical mall.There will be floating cashiers with specially equipped iPads and checkout stations that will automatically charge what's in a customer's shopping bag by reading the RFID electronic tags on each item. The aim is to reduce checkout time to a fraction of what it now takes, he said.And this is just half of Johnson's vision for the chain.The other part includes Johnson's "everyday low prices" approach that jettisoned coupons, seasonal sales and other traditional promotions. That resulted in confused customers and quieter cash registers, prompting Penney to tweak the concept in July by bringing back the word "clearance" into the chain's marketing lexicon."It's been a really hard year," the 53-year-old CEO acknowledged before an audience of more than 300 on the third floor of Penney's store at Valley View Mall, which is dedicated to the prototypes and closed to the public. "But we're getting through it."Johnson said some results have already surpassed expectations, particularly at the Levi's denim bars, where sales climbed 20 percent in August, and at recent Izod sales that were "off the charts." But with the new departments making up just 10 percent of some stores, the sales bumps don't add much to overall results yet, he conceded.While investors and analysts -- each offered a $25 Penney's gift card -- appeared impressed with Johnson's presentation, some said they weren't wholly convinced.An investment company employee, who declined to give his name because he wasn't authorized to speak to the media, questioned if Penney's traditional budget customer will be put off by Johnson's upscale concept that could fit well into a Nordstrom store. He wasn't alone."I am left very skeptical," said Prakash Patel, managing partner of Longview-based Jagadamba Investments, which has more than a third of its $16 million-plus portfolio in Penney stock. Patel asked how, without coupons and other tried-and-true retail promotions, will the chain lure people into the stores to see the new boutiques?"Their flyers are third-class marketing," he complained. "They should have phased out coupons gradually."A focus group of shoppers, asked their image of Penney's, used words like "old fashioned," "polyester," "disorganized," "for kids and older people," "traditional" and "bargain," Johnson said. The CEO said he would have described the chain the same way when he joined in June 2011.But after a tour of the prototype stores at Valley View, the same consumers revised their views, calling Penney "creative," "trendy," "sophisticated," "good value" and "organized," he said.Barry Shlachter, 817-390-7718Twitter: @bshlachterHave more to add? News tip? Tell us
