Judge Not

Twelve years ago tomorrow, according to the Jewish calendar, Nathan Ancell passed away.

He was 91, a frail man. I didn’t really know him. He was a member of my synagogue, a regular attendee of Sabbath services. He sat in the back. Back then I was the head gabbai of our congregation (a gabbai, for those not familiar with the Hebrew term, is a glorified head usher, assisting the clergy by handing out honors and maintaining proper decorum during the service).

As I walked around the sanctuary, I’d notice him sitting by himself, barely able to stand when necessary, suspenders keeping his pants high up on his torso in the manner of many an elderly man.

The day after Nathan Ancell died on May 31, 1999, his obituary made the front page of the NY Times!

Needless to say, I was flabbergasted. And professionally embarrassed, for you see, though I was a supposed maven of retailing, I was unaware Nathan Ancell was a co-founder of Ethan Allen, a visionary responsible for pioneering the concept of selling furniture in room settings. Far from being a down-and-out old timer, Nathan Ancell was rich, very rich.

Only after I confided my blunder to Gilda did she inform me that she had been to his home and it was spectacular.

That old saying is true...you can’t judge a book by its cover.


Penney for Their Thoughts: The last time JC Penney made a bold corner office move, as it did earlier this week naming Apple’s Ron Johnson their incoming chief executive as of Nov. 1, I was very much a part of it.

Penney’s problems today resemble those it had in the late 20th century. It was a muddled, middle of the road department store, with little to entice shoppers to walk its aisles, unless they were headed to a bathroom or to their car. Penney’s senior management were nice guys, but not really up to the task of making the retailer a meaningful shopping destination.

In April 1998 I wrote in my magazine, “Something radical must be done. Penney needs to break the mold of inbred succession it has clung to since James Cash Penney retired if it wants to make serious headway with its department store strategy.

“I nominate Allen Questrom.”

Questrom was the former ceo of Federated Department Stores. He had merged it with R.H. Macy. He was a merchandising wizard with strong people skills.

Penney’s board of directors discussed my suggestion at its next meeting, but nothing happened, until July 2000, when Penney named Questrom its next chairman and ceo. Everyone in the press clamored for an interview; when Questrom was shown a copy of my April 1998 editorial, he granted me the first one.

Questrom left Penney in 2004, replaced by Myron “Mike” Ullman. Ullman had been chairman and ceo of Macy and other high-end retailers, but his expertise was in finance. Penney initiated some strong cross-merchandising agreements with companies like Sephora under Ullman, but has not been able to have any sustained breakout ideas. It also suffered as its core middle and working class clientele pulled back spending during the recession.

There’s no doubt Johnson is the fair-haired executive in retailing. Apple stores scoop up an estimated $4,000 in sales per square foot. Penney, by comparison, does under $160.

It would be presumptuous to believe Johnson could jump-start Penney’s performance based on his Apple experience. For one, the product lines are too dissimilar. Apple has a limited number of stock keeping units (SKUs) vs. the wide assortments at Penney. Apple’s SKUs are rather pricey compared to underwear, socks, or a men’s suit or dress. Apple stores are an electronics playground, visited by dedicated, some might say, brainwashed, customers and would-be acolytes, with lots of committed, helpful staff in a small store format. Penney’s stores are huge. Staff is there mostly to replenish stock and straighten up, not sell, for there are few customers who need help picking out a set of towels or a prom dress.

Despite being sold at full price, the uniqueness of Apple products—the iPad, iPod, iPhone, iTouch, MacBook—draws shoppers into Apple stores. While other retailers in a mall are almost empty, even in midweek Apple stores are abuzz with activity. Penney might have unique merchandise as well, but its private label apparel and home goods must compete with name and designer brands often sold at a discount in countless stores in the mall and strip centers.

Johnson’s challenge will be to sprinkle into the mix enough products that are exclusive to Penney and create excitement around them. It’s not his Apple experience that will serve him well here, but rather his time as head of merchandising for Target. Just as Target has a cult-like following for its Michael Graves housewares and other trendy goods, Penney will have to undergo a transformation in the consumer’s mind.

Can it be done? Can Johnson do it? He’s probably among the few executives who could. But he’ll need help turning on the spending spigot. He’ll need an improved economy with stronger home sales. Until middle America starts spending again, Penney will just be treading water.