- unknown (b.)
An American businessman, he was most recently the CEO of J. C. Penney. Prior to that, he was the Senior Vice President of Retail Operations at Apple Inc. from January 2000 to November 2011, where he pioneered the concept of the Apple Retail Stores and the Genius Bar. Before Apple, he was previously Vice President of Merchandising for Target and he also worked at Mervyns. He grew up in Edina, Minnesota, the son of an executive at General Mills and a homemaker. He was captain of his high school soccer team and of its baseball team. He received his Master of Business Administration from Harvard Business School and his Bachelor of Arts in Economics from Stanford University. He is a resident of Atherton, California. At Target, he was Vice President of Merchandising, where he was responsible for launching the Michael Graves line of consumer products that raised Target's image beyond that of just an upscale K-Mart. He joined Apple Inc. as Senior Vice President of Retail Operations in January 2000. At the suggestion of Millard Drexler's (an Apple director and CEO of Gap Inc.), his retail team and development team headed by Allen Moyer, from The Walt Disney Company then began a series of mock-ups for the Apple store inside a warehouse near the company's headquarters in Cupertino. Under his leadership, the Apple Stores have, according to an article in the New York Times, been responsible for "turning the boring computer sales floor into a sleek playroom filled with gadgets". Under his direction, Apple's retail stores achieved a record level of growth, exceeding a billion dollars in annual sales within two years of their debut, besting the previous record set by The Gap. Apple today operates over 300 stores, including outlets in Australia, Canada, China, France, Germany, Italy, Switzerland, United Kingdom, United States, Hong Kong and Japan. In 2011 Apple Stores in the United States had revenue of $473,000 for each employee. According to the research firm RetailSails, the Apple Store chain ranks first among U.S. retailers in terms of sales per unit area in 2011, with sales of US$3,085 per square feet, almost doubling Tiffany & Co., the second retailer on the list. On October 31, 2007 he exercised 700,000 stock options in Apple stock with a strike price of $23.72, and then sold the stock later that day for $185 to $185.21 apiece netting him a $112m profit. It has been reported that he earned $400 million during his seven and a half years at Apple. Due to his success at Apple and Target, he was hired by J. C. Penney in November 2011, succeeding Mike Ullman who had served as CEO for the past 7 years. Ullman then served as Chairman of The Board of Directors but left in January 2012. Bill Ackman, a J. C. Penney Board member and head of hedge fund Pershing Square, had strongly supported bringing him in to shake up the store’s stodgy image and attract new customers. He was awarded $52.7 million when he joined J. C. Penney, plus he made a $50 million personal investment in the company. After being hired, he tipped Michael Kramer, an Apple Store veteran, as COO while firing many existing J.C. Penney executives. When he announced his transformation vision in late January 2012, J. C. Penney’s stock rose 24 per cent to $43. His actual execution, however, was described "one most aggressively unsuccessful tenures in retail history". While his rebranding effort was ambitious, he was said to have "had no idea about allocating and conserving resources and core customers. He made promises neither his stores nor his cash flows would allow him to keep". Similar to what he had done at Apple, he did not consider a staged roll-out, instead he "immediately rejected everything existing customers believed about the chain and stuffed it in their faces" with the first major TV ad campaign under his watch. He defended his strategy saying that "testing would have been impossible because the company needed quick results and that if he hadn’t taken a strong stance against discounting, he would not have been able to get new, stylish brands on board." Many initiatives that made the Apple Store successful, for instance the "thought that people would show up in stores because they were fun places to hang out, and that they would buy things listed at full-but-fair price" did not work for the J.C. Penney brand and ended up alienating its aging customers who were used to heavy discounting. He, himself was said "to have a disdain for JC Penney’s traditional customer base. When shoppers weren’t reacting positively to the disappearance of coupons and sales, he didn’t blame the new policies. Instead, he offered the arrogant assessment that customers needed to be “educated” as to how the new pricing strategy worked. He also likened the coupons beloved by so many core shoppers to drugs that customers needed to be weaned off." While head of J. C. Penney, he continued to live in California and commuted to work in Plano, Texas by private jet several days a week. On April 8, 2013 he was fired as the CEO of J. C. Penney and was replaced by his predecessor, Mike Ullman. He was dismissed after his "bold new pricing strategies clearly failed, but before being able to bring his ‘shop-in-shop’ strategy to fruition", since the Board of Directors was reportedly his costly ambitious turnaround plan. The “mini-shops” in Penney stores featuring hot brands, that just opened last year, were doing better than the rest of the store.
Noted For:Pioneer of the concept of the Apple Retail Stores and the Genius Bar, a tech support station located inside some Apple Retail Stores, the purpose of which is to offer help and support for Apple products
Category of Achievement: