Introduction

"Change, of course, is the only constant, the future never assured. So to not plan for change and not invest in the future would be crazy ”no matter what Wall Street says."

”Mil Batten, legendary JCPenney Chairman/CEO and, after his Penney retirement, President/CEO of the New York Stock Exchange.

"I've seen top notch vice presidents who were promoted to president and performed poorly. The last rung is a leap. How will people react to power? I know of instances where the new CEO became a totally different person."

”Mil Batten

Once upon a time a retail chain grew from the humblest of Western origins. Its core value was the Golden Rule, and the first stores were actually known by that name . The company rewarded thrift and hard work by giving its store managers unusual partnership and control, provided they (and their " associates ") performed significant community service. The company grew and prospered even during the Great Depression because America came to count on the chain's values and service as well as its good citizenship. Eventually, it anchored the malling of America, acquired other businesses, and became a giant enterprise. Clean as a whistle with deep pockets. What could possibly bring down such an icon of the American Dream? Yet down it came.

The subject of this book is the rise and fall of the J. C. Penney Company. It is not the present turnaround effort, which is being well covered in the business press. These pages end with two incidents in the spring and fall of 2000, when the new administration was just getting started. At that point in time the traditional J. C. Penney operation was rapidly becoming a thing of the past.

To present a more engaging cautionary tale, this book is written as narrative nonfiction. That is, I have dramatized the resonant moments that befell the company rather than simply lay out dry facts. But, as explained later, all scenes are based upon the people and events that gave shape and substance to Penney's remarkable history. I have also occasionally compressed time to move the story along (without bending the historical record, however).

Preparations were extensive . Research included a great deal of archival material, interviews of all kinds, related reading, and investigative newspaper reports . Documentary materials such as annual reports, company publications , videos , speech texts , presentations to Wall Street, court records, and a government investigation were studied. Of particular interest were materials and transcripts from Bob Pasch's Penney "Oral History" program (which, consistent with the old Penney altruism, was " open to view and use by the general public"). This presented reminiscences dating from 1905. Also quite helpful was an essay about Penney problems circulated casually by retired merchandise executives Dave Binzen and Dave Fulcomer. And a special resource for information and fact checking was Mary Elizabeth Curry's Ph.D. dissertation, Creating an American Institution: The Merchandising Genius of J.C. Penney , which was published by Garland Publishing in 1993.

The J. C. Penney Company was an odd duck in many ways. One quirk involved its communications to outsiders. On the one hand, historical material was generously available to almost anyone . On the other, the organization was traditionally tight with any current internal information. As a rule, when a Penney executive spoke to an external audience, it was on a general topic like textiles . In contrast to today's corporate blabbermouths, Penney executives just hated to talk about internal affairs in public (which made the speech described in Chapters 18 and 21 so unusual). The only predictably forthcoming inside information would be obligatory reports to stockholders and the financial community, and toward the end of the 1990s even these became artless obfuscations.

Therefore, because of the Penney insularity , I could not even have considered this book without inside knowledge. The book's research associate, Michael Ponder, had 23 years with the company and provided a thorough understanding of the chain's history. He also provided important research and insights. The eyes, ears, and heart of the narrative grew out of my own 16-year experience as a speechwriter in Fortune 500 executive suites. Nearly half of that period was spent at J. C. Penney writing for top executives, including the last two CEOs of the twentieth century. Between Ponder and myself we thoroughly covered the company's present and past.

In order to dramatize early company events, I have created incidents and dialogue for company pioneers like Jim Penney and Earl Sams. This was necessary because, other than Sams's remembrance of Berta Penney, no record of such scenes apparently exists. This work was done, however, after careful study of the histories and personalities involved, and I am confident that the situations depicted are reasonable reflections of those days and people.

Later historical scenes were largely developed with the aid of the oral histories. Here, dialogue was mostly extrapolated or woven from specific remembrances caught in the transcripts. The contemporary scenes are reconstructions resulting from interviews, documentary materials (videos, newspaper reports, speeches, etc.), and firsthand observations. In all cases, I am confident of the accuracy and fairness of the representations. ^[1]

This book is not a comprehensive history of the J. C. Penney Company. For example, aside from a surprising cash register story, there is little about Penney's once-advanced information technology. There is little about the company's landmark real estate abilities either. Those two topics alone would be significant in any complete history. Instead, while historical contexts are present throughout, the book concentrates on the major events that drove the company up and down.

Steve Rushin of Sports Illustrated devoted his column of September 23, 2002, to Johnny Unitas and the new and wonderful 1960s storytelling of NFL Films (Unitas lives mythically forever on film). When I read this fine piece, I found myself rereading the conclusion, first because it was so good, and then (in a humble appropriation) because it also seemed to summarize the ambitions for this book in a way that would never have occurred to me. Rushin quotes NFL Films founder Ed Sabol's favorite saying: "Tell me a fact and I'll learn. Tell me the truth and I'll believe. But tell me a story and it will live in my heart forever." So I hope that you learn and believe something here and that some of the stories in this book will live with you for a long time.

Bill Hare
Dallas, Texas
January 2004

^[1] The reader is reminded, however, that a work like this requires drawing conclusions and making judgments .