Ron Johnson could return to run Apple Retail

Posted:
in Genius Bar edited January 2014
Nearly a year and a half ago, Ron Johnson left his job as senior vice president of Apple Retail for the opportunity to act as the chief executive of JC Penney. Following his ouster there, it's possible he could return to run the chain he helped build over the previous decade.

Retail


Johnson was reportedly dismissed at JC Penney this week after failing to turn around the discount clothing retailer, and instead presiding over a 27 percent year over year drop in revenues and the lowest sales in two decades.

Efforts to revitalize JC Penney by doing away with regular sales cycles and trying to upscale the retailer's merchandise instead alienated its regular clientele of bargain shoppers, who had relatively little in common with the customers Johnson had served building Apple's retail chain.

Unlike Apple's 394 locations, the oldest of which opened in 2001, JC Penney has over 1,100 locations in the US, many of which were dated and struggling as anchor tenants of increasingly less attractive shopping malls. The task of revamping these outlets to reflect Johnson's vision for brand-oriented boutique "Shops" proved to be difficult and slow to implement, and didn't immediately achieve the results shareholders demanded.

Johnson at Apple

Johnson was no stranger to discount retailers, having gained experience managing Target stores prior to being recruited by Steve Jobs in 2000 to help build a new series of showrooms for the Macintosh for Apple.

His background in serving mainstream customers led Johnson to reportedly challenge Jobs' original retail vision of building boutique stores aimed specifically at creative professionals.

Not only was Johnson said to urge Jobs to build "a store for all Americans," but he also insisted that Apple's original plans for its first retail stores were all wrong, resulting in a reworking around a premium experience that displayed products by how they'd be used, rather than just grouping them by product category.

Unlike the task of rebuilding JC Penney's 1,100 existing stores, Johnson had the luxury of developing Apple's retail brand strategy from scratch. A decade later, Johnson was presiding over hundreds of Apple Stores that were raking in retail's highest revenues per square foot, silencing early critics who had predicted Apple would fail in its efforts to show off its own products.


Ron Johnson and Steve Jobs


Ron Johnson and Steve Jobs at Fifth Avenue store opening.

Johnson's departure from Apple

In June 2011, Johnson announced his plans to leave as Apple's Senior Vice President of Retail and take over JC Penney. Jobs wasn't pleased with Johnson's departure, reportedly disparaging the struggling, 110 year old business as "a B- or C company with B- people."

Jobs did convince Johnson to remain at Apple through the planning period of its critical holiday season, and Apple immediately began recruiting internationally for a new retail chief.

When Johnson left for JC Penney in November, he also took with him several other members of Apple's retail operation, including its chief financial officer Michael Kramer, causing further disruption for the company as it continued to search for someone with the skills needed to help expand Apple's retail stores internationally.

Apple Retail under Browett

By January 2012, Apple had selected John Browett, the former chief executive of UK discount electronics retailer Dixons, who had previously also run Tesco.com. Browett turned out to be as poor of a fit running Apple as Johnson was in taking the reigns at JC Penney.

Browett reportedly attempted to slashed costs at Apple, including hiring freezes and the deferment of any facility repairs deemed "not business critical."

The unpopular moves were apparently motivated by efforts to "run leaner" in order to further increase the financial performance already very profitable retail chain.

Following murmurs of discontent among retail staff, Apple's chief executive Tim Cook announced Browett would be leaving last October, after less than six months on the job. The firing meant Browett lost the majority of the 100,000 shares of stock he'd been offered at his hiring if he had maintained his position.

Since then, retail operations have been directly managed by Cook, who appointed Apple's vice president of finance Jim Bean to help support the company's retail operations. Neither Bean nor two other internal vice presidents who have been noted as potential candidates for taking over Browett's role as SVP of Apple Retail (Bob Bridger, VP of retail real estate and development and Steve Cano, VP of Retail) have been named as replacements.

Could Johnson return?

Apple Retail


That at least leaves open the possibility for Johnson to return to Apple, were both he and the company interested in restoring him to the position. However, prior to Johnson's firing from JC Penney, Apple's public relations head Steve Dowling commented in January that the company wasn't exactly leaderless."Retail has an incredibly strong network of leaders at the store and regional level."

"Retail has an incredibly strong network of leaders at the store and regional level," Dowling stated. "And they will continue the excellent work they?ve done over the past decade to revolutionize retailing with unique, innovative services and a focus on the customer that is second to none. Jim Bean is moving to Retail to help support our store teams. Jim has been at Apple for 15 years and is a great leader who understands our culture and focus on customer service."

At the same time, Apple continues to search for a new SVP of retail in a world where few external candidates appear qualified to run the company's very unique retail operations. Johnson is, of course, already familiar with how Apple Retail works. After a decade of running the organization, he may still want to do something different. But after his high profile disaster at JC Penney, there may not be many other options available.

Even without an SVP named to run its retail operations, Apple's stores have continued to perform even as the chain has grown dramatically. Despite its leadership turmoil, Apple's retail operations have more than doubled its profits over the past two years, jumping from $2.3 billion in earnings on $9 billion of revenue in 2010 to $4.93 billion in profits on $18.8 billion in revenue for 2012.

The company has outlined plans to spend about a billion dollars opening at least 30 new stores internationally in 2013, and replacing another 20 locations with larger stores capable of serving more customers. Last year, it spent nearly as much opening 33 new stores. Each store in Apple's retail chain of 394 locations generates an average of $50 million in annual revenue.

In addition to serving as Apple's training and customer service centers, Cook recently credited the company's stores as instrumental in launching new products like the iPhone and iPad.

"One thing that's not well understood," Cook stated in the company's January conference call, "I don't think we would have been nearly as successful with iPad if it weren't for our stores. The tablet was ingrained in [consumers'] minds as this heavy thing the Hertz guy held. But our store is the place to go and discover and try it out and see what it can do.

"I don't think the launch would have been nearly as successful without stores that welcome people in at ten million a week and show this," he added. The stores "give Apple an incredible competitive advantage."
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Comments

  • Reply 1 of 92
    zoetmbzoetmb Posts: 2,437member
    In spite of Johnson's former success at Apple, I think it would be a bad move for Apple to re-hire him. He's been pegged as a failure. If Apple scoops him up, I think it will make Apple's management look weak and it will have negative impact on the stock price.

    On the other hand, Jobs left Apple, wasn't exactly successful with NeXT (although he was with Pixar) and returned to Apple to be extraordinarily successful, so who knows?
  • Reply 2 of 92
    ankleskaterankleskater Posts: 1,287member

    Quote:

    Originally Posted by zoetmb View Post



    In spite of Johnson's former success at Apple, I think it would be a bad move for Apple to re-hire him. He's been pegged as a failure. If Apple scoops him up, I think it will make Apple's management look weak and it will have negative impact on the stock price.



    On the other hand, Jobs left Apple, wasn't exactly successful with NeXT (although he was with Pixar) and returned to Apple to be extraordinarily successful, so who knows?




    Perhaps Cook has been keeping the seat wrong for Johnson.

  • Reply 3 of 92
    paxmanpaxman Posts: 4,594member


    Well, that's good news.... I think... Sometimes someone is at their best only when they are working with the right team / person. Does that still apply to Ron Johnson and Apple? We don't know but at least he knows the company well, and he is one of the (if not 'the') architect of the success that is the Apple Retail phenomenon - which does not require a major upheaval imo.


     


    Ron Johnson is not a failure by any stretch. The moment he is back at Apple he is a success story again, who had a shot at something that didn't work out. He is not returning to Apple as the CEO.

  • Reply 4 of 92
    anantksundaramanantksundaram Posts: 19,101member
    This would be an admission of HR failure at Apple both internally (no decent second level human capital) and externally (unable to spot, attract, recruit talent). It would be a totally dumb move if it came to pass.
  • Reply 5 of 92
    65c81665c816 Posts: 133member

    Quote:

    Originally Posted by zoetmb View Post



    In spite of Johnson's former success at Apple, I think it would be a bad move for Apple to re-hire him. He's been pegged as a failure. If Apple scoops him up, I think it will make Apple's management look weak and it will have negative impact on the stock price.



    On the other hand, Jobs left Apple, wasn't exactly successful with NeXT (although he was with Pixar) and returned to Apple to be extraordinarily successful, so who knows?


    Jobs wasn't "successful" with Pixar.  He funded Pixar.  Ed Catmull was the man behind Pixar, as was John Lasseter.

  • Reply 6 of 92
    irelandireland Posts: 17,567member
    Hope he does.
  • Reply 7 of 92
    jd_in_sbjd_in_sb Posts: 1,484member

    Quote:

    Originally Posted by anantksundaram View Post



    This would be an admission of HR failure at Apple both internally (no decent second level human capital) and externally (unable to spot, attract, recruit talent). It would be a totally dumb move if it came to pass.




    But Apple did have an HR failure. Admitting their mistakes and correcting them is not a dumb thing for a corporation to do.

  • Reply 8 of 92
    creepcreep Posts: 80member


    This post should be marked EDITORIAL.  Or better yet, SPECULATION.  The other writers on this site have no problem sticking to facts in their stories, while DED continually injects his fanboy opinions/desires into each of his articles.


     


    On second thought, the post belongs in the forums, not on the front page of AI.  This doesn't come close to being "news".

  • Reply 9 of 92
    irelandireland Posts: 17,567member
    zoetmb wrote: »
    In spite of Johnson's former success at Apple, I think it would be a bad move for Apple to re-hire him. He's been pegged as a failure. If Apple scoops him up, I think it will make Apple's management look weak and it will have negative impact on the stock price.

    You can't run a company like Apple by thinking about the stock price. That's one thing Steve has thought them well about.
  • Reply 10 of 92
    jungmarkjungmark Posts: 6,679member
    This would be an admission of HR failure at Apple both internally (no decent second level human capital) and externally (unable to spot, attract, recruit talent). It would be a totally dumb move if it came to pass.

    Apple tries to hire the best. Why wouldn't you see if he was interested? Ron left for supposed greener pastures. It didn't work out because he made drastic changes in a short period of time.
  • Reply 11 of 92
    charlitunacharlituna Posts: 7,215member
    ireland wrote: »
    You can't run a company like Apple by thinking about the stock price. That's one thing Steve has thought them well about.

    Indeed. That said I won't be shocked in Ron doesn't go back to Apple. At lease not as anything greater than a consultant. That time has passed and while he didn't fit with JC Penny, he's hardly a failure. He could go somewhere else, or even start his own firm as a freelance consultant
  • Reply 12 of 92
    irelandireland Posts: 17,567member
    65c816 wrote: »
    Jobs wasn't "successful" with Pixar.  He funded Pixar.  Ed Catmull was the man behind Pixar, as was John Lasseter.

    That's a gross oversimplification. He bought the company. He believed in Catmull's vision. He inspired them. He was heavily involved with the design of the building which was built with a specific auditorium design for specific reasons. And he made people like Catmull excel like only Steve knew how. He would give them all advice often and would give address speeches there.
    At a recent press junket, Stanton was asked why he decided to dedicated Carter to Jobs and his answer was both logisically sound and beautifully poignant. Read it after the jump.

    Here’s what Stanton said when asked if he’d talk about why the film was dedicated to Jobs:

    We just happened to be, sadly, the first production up that was Disney that wanted to give [a dedication]. And I personally wanted to. I talked to John [Lassater] about it because I didn’t want to steal any thunder from Pixar’s dedication because that’s really the real family member for Steve. But it felt right just cause I didn’t want too much time to pass without giving him some sort of permanent acknowledgement. And I talked to his wife.

    It was kind of eerie because on the set I would get asked all the time, from all these people, ‘What Pixar was like?’ And it was fascinating to talk to all these movie people that knew all the films, but some of them didn’t even know Pixar was in San Francisco. It was funny. They knew of us, they knew of these movies and knew there was something different but they didn’t get it to the point [where they knew] where we were and stuff. And it would be such a long explanation to them about, trying to tell them why it ran differently and why the movie came out the way they did, that I ended up just simplifying my answer down to ‘Steve. Steve’s why.’

    And I did really realize how much, because I was now living it. I was now pregnant with the dysfunction of Hollywood to make this movie and how this all works, the good and the bad, and it was amazing to see how much he had firewalled us from. Like we knew he had, but he had truly firewalled us and protected us from all the bad influences of the outside world and we had just been raised in this little eden in San Francisco and had no clue how bad it could be. And so I really have to give so much more credit to him than I ever was, even though I always was, of how much he was a major factor for Pixar.
  • Reply 13 of 92
    apple ][apple ][ Posts: 8,571member

    Quote:

    Originally Posted by Ireland View Post





    You can't run a company like Apple by thinking about the stock price. That's one thing Steve has thought them well about.


    But Jobs is no longer around, and even if he had a screw you attitude towards wall street, that doesn't mean that others can simply emulate his attitude and get away with it.


     


    And since Apple is now in the habit of apologizing to everybody (Maps, China), I think that they should make their company more attractive towards investors also. Clearly, the sentiment towards Apple is down in the dumps currently, and Apple should be more proactive in turning around that negative sentiment.

  • Reply 14 of 92
    mdriftmeyermdriftmeyer Posts: 7,241member
    Quote:
    Originally Posted by 65C816 View Post

    Jobs wasn't "successful" with Pixar.  He funded Pixar.  Ed Catmull was the man behind Pixar, as was John Lasseter.

     



    You are dead wrong. Jobs funded and created every single business relationship for PIXAR, drove all business decisions and directions of PIXAR, designed their entire Campus, interviewed all key personnel and key leadership while working in a highly driven, competitive and collaborative team environment that both Catmull and Lassetter will tell you doesn't exist without Jobs.



    In short, Lassetter and Catmull are worth diddly squat without Jobs and aren't leading Disney at the moment in their respective positions, without the deal Steve brokered with Disney. Neither is Iger for that matter.



    Working with such leadership at NeXT and Apple taught me that most of this brilliant talent couldn't open up a lemonade stand and make a dollar without the vision and focus Steve instilled into them.
  • Reply 15 of 92
    tbelltbell Posts: 3,146member
    65c816 wrote: »
    Jobs wasn't "successful" with Pixar.  He funded Pixar.  Ed Catmull was the man behind Pixar, as was John Lasseter.

    You are incorrect. Jobs strengths has always been he was unfraid to spend his money, he was willing to take chances, and he knew how to find smart people to work for him. Those people were the creative forces at Pixar, but he took a big risk in supporting their vision, and he was active in selling it.
  • Reply 16 of 92
    applesauce007applesauce007 Posts: 1,607member


    Welcome on back Ron.  We need ya...


     


    I seriously doubt anyone can run Apple retails as well as Ron Johnson.


     


    He was instrumental in building it so he understands what it is all about.


    He tried to replicate it at JC Penny and failed so he no doubt learned some valuable lessons.


    If he comes back to be as good as he was before, it would be great, but I think he will be better.


     


    Next, I want Scott Forstall back at Apple.  We need the veterans to help move Apple forward.

  • Reply 17 of 92
    irelandireland Posts: 17,567member
    creep wrote: »
    This post should be marked EDITORIAL.  Or better yet, SPECULATION.  The other writers on this site have no problem sticking to facts in their stories, while DED continually injects his fanboy opinions/desires into each of his articles.

    On second thought, the post belongs in the forums, not on the front page of AI.  This doesn't come close to being "news".

    Well, that's a whole 'nother story ;-)
  • Reply 18 of 92
    gtrgtr Posts: 3,231member


    That would be nice to see Ron come back. I think he's the right man for the job.


     



     


    However, it would be even nicer if we could get the guy on the right back...

  • Reply 19 of 92


    Apple will more than likely throw the bank at Ron Johnson and make it hard to say no. I hope he returns because he will be very valuable to the retail division.

  • Reply 20 of 92
    apple ][apple ][ Posts: 8,571member

    Quote:

    Originally Posted by Soundvision View Post


    Apple will more than likely throw the bank at Ron Johnson and make it hard to say no. I hope he returns because he will be very valuable to the retail division.



    Apple's retail division is not any trouble is it?


     


    Apple has plenty of other problems, and none of them are retail, and they won't be fixed simply by bringing this guy back.

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