JC Penney CEO Ron Johnson on Steve Jobs: Transformation isn't easy

Summary:Ron Johnson, who led Apple's retail business, is transforming JC Penney and has a rough road ahead. He recalled Steve Jobs' initial disappointment at the SoHo Apple store opening in 2002.

JC Penney CEO Ron Johnson, who used to run Apple's retail store business, has had a rough year. Johnson is retooling JC Penney, watching sales fall and trying to convince investors that the long term bet makes sense.


That long-term bet for Johnson is this: Turn JC Penney into the equivalent of Apple's App Store for retailing. Small and large product makers will be the developers. Will it work? Who knows? But Johnson sure mentioned his old boss, Steve Jobs, a lot on an investor webcast outlining the company's turnaround plans. 

Here's a full excerpt of Johnson's transformation lesson he learned from Jobs:

In 13 weeks and two days we'll be done with our year of transformation and then hopefully people will understand your pricing better and we'll get more traffic, better marketing and start to grow again. But we've got to get through the year. But I want you to understand, there was no choice than to choose a year of transformation to get to here. And in the long run we're going to be better off. Because we're going to jump start the new JCP. I'll end with a thought about my time at Apple.

You know, I watched this movie before. When I joined Apple in 2000, Apple was a company dwindling. Everyone said to me 'what are you doing there?' Michael Dell was asked what he'd do. He said I'd give the cash back to the shareholders and close the business down. Michael's a smart guy, but he represented a thought that most people didn't think was that crazy. We were there. Apple wept through 2002 and I think sales were down 38% as we dreamed about becoming a digital device company.

But Apple invested during that downturn. That's when Apple built -- started to build its chain of stores, that's when Apple transitioned to Intel, that's when Apple started its app division, that's when Apple imagined and built the first iPod. We went through that. The stock didn't get up to where I joined until 2004. I spent four and-a-half years at Apple. Not a very good time for my wife. Why did we do this? But it worked out okay. But it wasn't easy. Just like this isn't easy. But transformation's never easy.

I remember the day we opened our Soho store. How many have you been to the Soho store, lower Manhattan. That opened on July 17th, 2002. It was a day after Macworld. That's when Apple was kind of at the bottom and Steve had really worked hard with myself and a few other people in this room to design that Soho store. We were really proud of it and it was a day after Macworld. I made the decision to open at 8:00 a.m. thought that was kind of a good time open a store. It turns out nobody in lower Manhattan was up at 8. Steve came over to the opening and he was kind of not one of his better moods. Most of the time, he actually was a lovely guy, very upbeat. And there were about 50 to 100 people in line for an Apple store opening in Manhattan. At that time we didn't believe could we make money. Steve and I talked about a half hour. He said, you know, nobody cares. There are days I feel like just giving up. Nobody cares. He had read all the reviews from (Walt) Mossberg and David (Pogue) in the New York Times. He said nobody understands what we're doing. Nobody cares.Sometimes I just want to give up. And he said maybe the store's not going to work. I said all right. Steve got in his car and went back uptown. He was staying at the Four Seasons. I was stuck with the store so I had to stay. About 11 Soho started to wake up and people started to come and we had a person at the door. Traffic counters. From 12 to 1, 1,000 people walked through the door, from 1 to 130, 800 people walked through the door. I said Steve, you've got to come back. He says I don't want to come back. Steve drove down. He actually arrived around 1:30. If you've been in that store there's a glass bridge behind the Genius Bar you can stand on. It was actually really hard to design that in a lot of ways. Steve and I stood on that bridge at 1:30. He didn't leave the bridge until 8. Six and-a-half hours. He immersed himself in his customer, what he loved. And we went to dinner at and talked about it and Steve kind of got back in the game. It's really hard to transform things. It isn't always fun. But that's what we're going to do and I've seen this movie and I'm really excited to see how this one plays out.

Topics: Apple



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