JCPenneyJ.C. Penney (JCP) is banking on a key architect of Apple's (AAPL) winning retail formula to work his magic on the department store chain.

The investment community has cheered the appointment of Ron Johnson, who has been credited with the success of the Apple Store -- a darling of the retail sector -- as CEO of the $17.8 billion chain come November.

Johnson, senior vice president of retail at Apple, will succeed Myron "Mike" Ullman, who will remain with the company as executive chairman for a three-month transition period to end Feb. 1.

Johnson might just be what J.C. Penney needs to breathe new life into the chain, analysts said.

Although J.C. Penney has pulled off a notable revamp over the past decade, shedding much of its dowdy image with the introduction of trendy, exclusive product lines such as MNG from Mango, the hip fast-fashion chain, as well as in-store Sephora cosmetics shops, store sales have lagged as the recessionary climate continues to put pressure on the budgets of its core, middle-income shoppers.

At the same time, department stores Macy's (M) and Kohl's (KSS), which have also been aggressively rolling out exclusive merchandise lines, have outperformed J.C. Penney, Craig Johnson, president of retail consultancy Customer Growth Partners, told DailyFinance.

Although Ullman should get ample credit for redefining J.C. Penney over the last six years, "The brand remains dated," he says. "They have to really reinvent it and make it a tomorrow brand instead of a yesterday brand."

And Johnson has the right stuff to transform the retailer, Ullman says. "He brings three major ingredients to the table: customer experience, branding [expertise] and innovation. Those three things are exactly what the doctor ordered to rejuvenate and reinvent the J.C. Penney brand."

An Off-Beat CEO Choice

Plucking an executive from Apple is an edgy move for the 109-year old department store chain, Kevin Ryan, CEO of Gilt Groupe, the nation's biggest private-sale website, told DailyFinance.

Johnson "is an interesting and creative choice because of [Apple's] success as a non-traditional retailer," Ryan says.

Johnson built Apple's stores from scratch, crafting what has been hailed in the retail sector as an unparalleled, idiosyncratic specialty-store experience marked by an uncluttered shopping environment and a cult-like attention to customer service.

By making Apple's stores airy, for one, "Johnson broke a traditional rule of retailing -- to put as much merchandise as you can in front of the consumer" -- and made it work, Ryan says.

By contrast, "When you walk into J.C. Penney today, it's sometimes hard to see the merchandise because it [can be] crammed in."

Still, merchandising a specialty computer store and merchandising a department store -- which sells everything from T-shirts to toasters -- are two very different selling propositions. And unlike Apple's relatively new store base, J.C. Penney is saddled with many stores in old, declining malls, Paul Swinand, a stock analyst with Morningstar, told DailyFinance.

The Target Factor

While the investment community is abuzz with Johnson's Apple pedigree, his track record creating distinct retail environments goes beyond that iconic company.

During a 15-year career at Target (TGT), Johnson played a key role in burnishing the retailer's image as the nation's cheap-chic discounter by spearheading the launch of exclusive designer home collections, such as the Michael Graves housewares line in the late 1990s that brought edgy lines with an upscale feel to a mass merchant's audience -- a new concept at the time.

Indeed, Johnson's work as vice president of merchandising for Target will be even more relevant for his new role than his tenure at Apple, Swinand says.

"If you think about Target, it [was] about finding that niche that's a little bit chicer and cooler, which is what Penney wants to be in soft goods." And if J.C. Penney has a shot at upping its cool quotient, Johnson is the executive to do it, he says.

That's going to mean staying relevant to its core, older shoppers with recent deals such as the exclusive Liz Claiborne line, "while helping J.C. Penney connect with a younger customer."

But while the Liz Claiborne line might be the perfect brand for the retailer's traditional Middle American consumer, "It doesn't move J.C. Penney forward in terms of tomorrow's customers," Johnson says.

Despite the retailer's challenges, Johnson appears to be a believer in J.C. Penney's future success.

And he's putting his money where his mouth is -- literally. Johnson invested $50 million in the company by purchasing warrants on 7.257 million shares of company stock.

"I have tremendous confidence in J. C. Penney's future," Johnson said in a statement.

"I've always dreamed of leading a major retail company as CEO, and I am thrilled to have the opportunity to help J. C. Penney re-imagine what I believe to be the single greatest opportunity in American retailing today, the department store."

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frog

Pennys is a good store with decent priced merchandise. Leave it the hell alone!

June 24 2011 at 9:54 PM Report abuse rate up rate down Reply
whatever

Johnson is already starting to get his ducks in a row to lower Penneys salary costs. He has already made it apparent that he intends to get rid of all the more tenured store managers and assistant store managers beginning Feb 1 of next year (the beginning of the companys fiscal year). There are no plans to replace these people, which is going to leave a bunch of inexperienced $10/hour people to run the stores, handle day to day operations, etc. JC Penney is only going to get worse for shoppers. But hey, at least the investors (those who don't shop places like Penney's to begin with) will get an extra few cents on their shares!

June 24 2011 at 9:56 AM Report abuse rate up rate down Reply
bopaan

The Penney's near me is a larger store then most and has a larger selection then most. They are one of the few places you can find real cotton T shirts and a great selection of athletic wear. They also carry real leather shoes and they have one of the best selections of longer length curtains of anyone, at very reasonable prices. I think the store itself could have more appeal if it were set up in smaller departments like macy's or Dillards. I prefer penney's quality over kohls or Target and their prices are well in line. I know I can count on them for certain items especially in the home department. Their new brands A.N.A and Nicole Miller bring some exceptional fashions to the store. I have always loved Nicole Miller dresses and jeans now she has a line at Penney's everyone can afford.

June 24 2011 at 7:52 AM Report abuse rate up rate down Reply
artmagic1953

In their current state the stores are unshoppable. I use to love Penney's, but not now. I work in retail and know the first thing they do is cut hours, but Penney's is in serious need of people to pick things up off the floor, empty dressing rooms. Only a toothpick can move between the racks. It looks like a thrift store gone bad. Customers are lazy slobs and without people to pick up after the slobs a store goes to crap in a hurry.

June 24 2011 at 6:36 AM Report abuse rate up rate down Reply
1 reply to artmagic1953's comment
tony

I dont know what store you live near, but our JCpenney is much different than that. we are very aware of A.D.A. guidelines, have specific associates assigned to areas such as fitting rooms and recovering the floor all day, and our customers tell us its an easy store to shop with merchandise at great quality. I think if the store environment is bad, then thats a direct reflection on that particular store manager.

December 29 2011 at 3:35 PM Report abuse rate up rate down Reply
Victor

I ihope they do change their image. It is like shopping in some hick country store.

June 24 2011 at 6:04 AM Report abuse rate up rate down Reply
cae973

As a JKc Penney shopper all i can say is its not easy to shop at penneys due to the horrible selection. One can t even buy decent curtains as most of their stuff has beads and crap hanging from them. Outside of their small selection of Alfred Dunner mature women have zero to choose from as the clothing is all for teens and early twenties. I can live with that as I just order elsewhere online but its sickening that they sell such gawdy curtains. Personally if i was running the store i would fire all the buyers and hire buyers who actually have some taste!

June 23 2011 at 10:51 PM Report abuse rate up rate down Reply
balexis879

I hope they don't change too much. It's hard to find classic conservative styles these days. JC Penney is where I go for basic wear but I've noticed the store is becoming a lot more trendy. They are discontinuing the Cabin Creek brand. I love the Oxford shirts under this brand. I bought up a lot of these this spring!

I hate the modern fit pants. The pants that don't fit at the waist properly--they go below the waist. Most of the ladies pants are made this way now. JC Penney still has a few brands (e.g. Briggs, east5th) that sell normal ladies pants that fit at the waist.

Years ago when I lived in skirts I never had a problem finding a basic black skirt (no frills) at JC Penney. Now all I see are weird prints, designs, and hems.

The quality of the clothes material has changed drastically. St. John's Bay especially is not what it used to be. They should discontinue this brand and keep Cabin Creek. I'd rather pay a little more for better material.

Although Worthington, Jones Wear, and Liz Claiborne are good brands you don't get enough conservative styles here like solid, neutral colors and tops that cover up the neckline more. Too many deep V necks and low necklines in these brands.

IZOD was a good brand with basic styles and colors but they discontinued this too. Everytime I come upon a good thing it goes away.

Well, there is Land's End and L.L. Bean but I'm able to get right to JC Penney faster and can pick up my orders right at the store. This I love.

June 23 2011 at 10:16 PM Report abuse rate up rate down Reply
savemycountry911

Carry better products. I almost never find anything I want there.

June 23 2011 at 10:04 PM Report abuse rate up rate down Reply
cwestbrookjr

The problem with JC Penney is that the corp. officers and Board members are professional corp officers and board menbers lacking real retail department store expierence. the company has abandoned its founding principles as laid down by james cash penney and uses centeralized buying with no real input from the stores on the merchandise mix...the quality of merchandise is down and no one , not even the associates can tell you which merchandise is a good buy since all merchandise is brought in with over the top markups in anticipation of being sold at a highly discounted price.

June 23 2011 at 8:22 PM Report abuse rate up rate down Reply
Ms. HR

I've boycotted JC Pennys in Torrance, CA. When I was in the dressing room trying on clothes, the announcer was letting customers know about the sales - speaking in Spanish! I thought I was in Tijuana! If we're constantly bitching about about illegal aliens why do we cater to them.

June 23 2011 at 7:02 PM Report abuse +1 rate up rate down Reply
1 reply to Ms. HR's comment
tony

ignorant

December 29 2011 at 3:39 PM Report abuse rate up rate down Reply