A Death in The Family

A Death in The Family

Gary A. Smith

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On?May 16, 2020, I opened the?New York Times.?I always scan the front page to see what happened, then I look at the bottom of the page to see what stories are inside that may be worth reading.?You see, unlike my wife who will read the?Times?from cover to cover, I am a skimmer.?I only read stories that pique my interest.?If nothing does, I switch to?Newsday?and go straight to the comics.?However, that day a story that did catch my eye.

In bold print it read, “Bankruptcy of J. C. Penney.”?It went on to read, “The 118-year-old chain’s collapse represents the biggest retail casualty so far of the coronavirus pandemic.”?I knew better, however.?Penney’s – I’ve called it that for over five decades – may have been killed by the corona virus, but that was merely the final straw.?Penney’s has been in decline for a while and like the elderly person that breaks a hip, while it’s the pneumonia that ultimately does them in, it’s the break that originally put them down.

It read like and obituary to me.?It was like a death in the family.

You see, I was a member of the Penney’s family.?

For over twenty years, J. C. Penney was an integral part of my family’s life.?My father became a Penney’s associate shortly after Christmas in 1964 when Penney’s opened its catalog operation in Milwaukee, Wisconsin after purchasing General Merchandise Company. ?We loved being a Penney’s family.?At that time, you could buy almost everything from the J. C. Penney catalog or retail store.??Each fall and spring virtually our entire wardrobes came from Penney’s.?Each Christmas we practically memorized the Christmas Catalog.?We bought our first color TV from Penney’s.?On my tenth birthday I received my first BB gun, a Crossman pump air rifle from Penney’s.?

I was fascinated by the company lore, and I read nearly every piece of Penney literature that my father would bring home.?I had always been a student of history.??As a kid, I found the stories about real people to be fascinating, I still do.?It wasn’t long before J.C. Penney, the man, became one of the people I admired.?In the company writings at the time, he was referred to as The Founder.?

James Cash Penney opened his first store, the “Golden Rule” in Kemmerer Wyoming in 1902.?The name of his original store coincided with Penney’s innate sense of fairness.?He believed that customers and employees should be treated as they themselves would want to be treated.?Penney’s stores did not have employees, they were “associates.”?It was a simple culture based on respect and fairness.?In a “Person to Person” interview with Edward R. Murrow in 1957 J. C. Penney said, “Being a country boy and not acquainted with city ideas, my first store was started in a town of 1,000 people.?I chose that because I felt that I could get to the hearts of the people quicker in the small towns, then I could in a large town.”?His store was profitable from the start.?A few years later he bought out his original partners and expanded to more small towns.?In 1913 he put his name on the store chain.?Throughout his lifetime, and for many years after his death, the cornerstone of his philosophy was to offer low prices and fair value to his customers.?

That philosophy was put on paper in 1913 and called?The Penney Idea.

1. To serve the public, as nearly as we can, to its complete satisfaction.
2. To expect from the service, we render a fair remuneration and not all the profits the traffic will bear.
3. To do all in our power to pack the customer’s dollar full of value, quality and satisfaction.
4. To continue to train ourselves and our associates so that the service we give will be more and more intelligently performed.
5. To improve constantly the human factor in our business.
6. To reward the men and women of our organization through participation in what the business produces.
7. To test our every policy, method, and act in this wise: Does it square with what is right and just???????????

Does it square with what is right and just???This philosophy has kept me grounded and became the cornerstone of my personal business philosophy.?

My father met The Founder in 1967 in Atlanta.?I have a picture from that meeting.?I also have the laminated cover of?Modern Materials Handling?magazine from 1970 featuring my father on the cover as the first manager of the J. C. Penney Atlanta Catalog Center.?I has been on the wall of?every office I have occupied.

Our Penney family was a tight-knit group.?Many of my happiest moments growing up had to do with Penney events or involved Penney associates.?During some of the saddest times of my life my Penney family was also there to support me.?One of my proudest moments was becoming a Penney’s management associate after I graduated from college.?It was a great training ground.??I learned how to manage by learning how to budget, hire and train people.?I learned to lead through the examples and the inspiration of some of the best leaders I had the privilege of knowing.

Years after leaving Penney’s, I still find inspiration from the philosophy of The Penney Idea.?However, it seems?the company itself lost those ideals.?I don’t know for sure, but it seems to me that subsequent Penney leadership abandoned The Penney Idea in favor of the concept of shareholder primacy.?Suddenly, the typical Penney shopper shifted from Mr. Penney’s vision of a person living in a small town, to one that lived in the big city.?They shifted from salt-of-the-earth to sophisticate.?Penney’s left its roots, its bread-and-butter customers that had built the company to chase higher margins and race to maximize quarterly profits.?The problem was that that it seemed the only people that bought into this idea was Penney leadership.

It is said?that after the fall of the Soviet Union in 1991, the United States lost its rudder.?After the fall of Communism, the US had no more real enemies to fight and no more windmills to tilt.??Suddenly there was no “evil empire.”?And when Sears retail stores got in trouble, instead of picking up Sears customers, Penney’s decided to chase the customers of the big department store chains like Federated.?Frustrated, their former loyal customers switched their allegiance to Wal-Mart and Kohl’s.?

At the same time, the Penney's catalog has lost its luster, too.?On-line ordering from Penney’s website became slow and frustrating.?Delivery is slow as well.?I still buy from Penney's - old loyalties die hard.?But it is no?wonder Amazon is eating their lunch!

In the last fifteen years J.C. Penney has been a revolving door for CEO’s.?Five have been hired and fired or left in that time.?Sales had been in decline for the last 20 years, according to the?Times?article when it brought it Ron Johnson, the former retail chief from Apple.?Johnson had a vision of transforming J.C. Penney stores into a collection of boutiques.?The result was disastrous.?Customers left in droves and in 2013 Penney’s sales alone dropped by 25%.

In 2018, Jill Soltau became J.C. Penney’s CEO, ostensibly to bring it back to profitability.?J.C. Penney ultimately filed for bankruptcy under Chapter 11 on May 15, 2020.?Just five days earlier, on May 10, Ms. Soltau?was paid a cash bonus totaling $4.5 million.?How does that square with what is right and just?

I wonder what The Founder would think.