Penney for My Thought

What percentage of success is attributable to luck and what percentage by design?

Ron Johnson, the new CEO of J. C. Penney and the man credited with the success of Apple Stores, so far seems to have met neither on his new job. The latest earnings report from Penney was a disaster, at least in the eyes of Wall Street. Here is how Reuter reports it.

(Reuters) - Shares of J.C. Penney Co Inc (JCP.N) opened 19 percent lower on Thursday after the department store operator reported its sharpest drop in sales since announcing a transformation plan 13 months ago.
  The results prompted at least three brokerages to cut their price targets on the stock, which has lost 48 percent of its value in the past year.

"We were most surprised by the more than 1,000 basis points decline in gross margins in the quarter," Deborah Weinswig of Citigroup wrote in a note, cutting her price target on the stock to $22 from $25.

Mr. Ron Johnson of course insists that turning around a long time failure like Penney is a multi-year project and he needs more time to execute on his new strategy. I have no basis of doubting Mr. Johnson's sincerity. However, it has been my general observation that in the world of business, predictions are never wrong; they are merely premature. Strategies are never erroneous; they always need more time. Here is a thought. Perhaps the success of Apple Stores have something to do with those iphones and ipads and less to do with selling said items on tables instead of counters.