Two Quarters?


Two Quarters ?

A year later in New York, Penney's president, Ray Jordan, was just returning from a difficult meeting with his boss, chairman Mil Batten. The two men oversaw Batten's baby, the great transformation of the J. C. Penney Company. Once America's Main Street merchant, the giant organization was becoming king of the malls with full-line department stores. The long-range business plan also included an expensive move into the mail order catalog business, which was soaking up money with no profit foreseen until the early 1970s. Consequently, dividends were down considerably. Wall Street, the financial press, and Penney stockholders were highly critical.

"Isn't it ironic?" Batten had said. "Now they complain bitterly because we didn't stay rooted in the past"

"Yeah, but if we had," Jordan jumped in to straight-man the punch line, "and then started to founder like Wards" [1]

"They'd scream bloody murder because we stayed rooted in the past!"

"Nobody said the job was easy." "My, oh my, oh my."

"Maybe we should make this an ongoing educational project, instead of just saying something in the year-end letter. Send reports and ˜progress reports , and you give some talks on the Street."

"I hate speeches. Unlike our founder." "Well, maybe we need to communicate better. ˜Our future's at stake, we gotta keep on track and stay with the plan, something like that."

"Maybe, I don't know. See what the others think." "Will do," Jordan had said without much enthusiasm as he rose. Both men were tired of shouldering great responsibilities while fencing with myopic stockholders.

Jordan headed toward his office abstracted in thought when his secretary called, "Oh, Mr. Jordan, Mr. Penney wants you to call him."

"Oh, no," he breathed to himself, anticipating more pressure on the transformation. Might be catalog, he thought, since catalog was the whipping boy of the hour . He dialed the founder immediately.

"Mr. Jordan, I was wondering if, at your convenience, you might drop into my office for a moment."

"Certainly, Mr. Penney. I'll be right up." "At your convenience, Mr. Jordan."

"It's convenient right now, sir." "If you're sure."

On his way to the founder's office, Jordan shook his head with amusement . At his convenience! There was Mr. Penney, last of the mercantile royalty, still coming to the office at age 91 and still refusing to pull any historical rank. Why, they couldn't even get the old man to use a company car. Every morning he could be seen walking from his Park Avenue South apartment building to a bus stop!

Despite Batten's brilliance and Jordan's steady effectiveness, James Cash Penney was still the star of the companyceremonially. He was by far the most popular corporate symbol in the United States, which represented a triumphant comeback from the humiliation of his financial failure and nervous breakdown suffered decades before. But while Penney had been trotted out for company conventions, store visits , and press opportunities, some New York insiders almost held the founder in contempt. The company had thrived without him and even despite him. And, once upon a time, hadn't several key Penney men actually bailed him out?

When Batten rose to power, his personal project had been the rehabilitation of the founder's reputation in the New York Office. In the field and to the public, Penney was a mercantile and moral god. So Batten set about promoting Penney's accomplishments, beliefs, and talents in the Big Apple. In time, Jordan joined in the effort.

Batten had long thought that Penney's self-improvement correspondence course for associates in the 1920s was a stroke of genius. He considered the founder's bold philanthropy, killed by the Great Depression, as uplifting and feasible in better times. And Batten had come to have an especially high regard for Penney's retail and personnel judgment.

Penney appreciated the renewed courtesies in New York. But he had never been bothered much by the remarks that he knew small men made behind his back. He ignored them, as he had learned to do the hard way long ago. Penney knew his role and had comfortably settled into it over the years . Today he was content to be only a public figure, to be an adviser only when prevailed upon, and to act as a conduit only when ardently summoned. It was in these roles, bolstered by the new respect of top management, that Penney happily lived out the rest of his life.

Jordan knew of the founder's desire generally to avoid anything but the ceremonial. But he also knew who was the J. C. Penney Company, and he knew it wasn't Batten or himself. He felt that Penney probably could not avoid being recruited for a cause, and therefore Jordan rapped quietly on the founder's door with more than a little apprehension.

"Thank you for dropping by, Mr. Jordan." "No problem, sir."

"Actually, it's me. I have a little problem," he smiled. "Catalog?"

"Catalog?" "Well," Jordan said still warily, "it seems to be on everybody's mind these days."

"Not mine," Penney replied. "It's something else." The founder hesitated, as if unsure how to proceed.

"Anything I can do, Mr. Penney." "It's about our barber."

Jordan hesitated. "Our barber? We have the same barber? I didn't know that."

"We do, and I have a problem." " We have a problem, Mr. Penney," Jordan said with relief. "That man is a better storyteller than a barber, I'm afraid."

"He is?" Jordan quickly regretted the comment. Clearly, he heard stories that the old man didn't. "Well, there's another problem, though?"

"Yes. What do you tip the man, Mr. Jordan?"

"Tip?" Jordan should have seen it coming, Penney being Penney. Still, it was all he could do to keep from grinning. "Oh, I don't know. Whatever loose change I have in my pocket. A couple of quarters."

" Two quarters?" Jordan thought quickly and followed with, "If I'm feeling generous and he's somehow managed to give me a decent haircut. But I wouldn't worry about it anyway, Mr. Penney. After all, you're a celebrity, and when he's got you in his chair he's the star of that barber shop. He ought to pay you ."

The old man chuckled. "I never thought of it that way." "So, when do you and Mrs. Penney return to Arizona?" "Tomorrow morning. I'm going to the apartment and pack soon. Right after my haircut," said Penney, now happily relaxed .

[1] The Penney Company had anticipated a recharged peacetime economy because of World War II and prepared for it (leading to its migration from Main Street to malls). But Wards did the opposite . Sewell Avery, head of Montgomery Ward, thought that wartime prosperity was setting up a postwar depression. Hence, the company was frozen and locked down to await the worstand never realized its error until it was too late.




Celebration of Fools. An Inside Look at the Rise and Fall of JCPenney
Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney
ISBN: 0814471595
EAN: 2147483647
Year: 2003
Pages: 177
Authors: Bill Hare

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