Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney

Citation

Keyes, S. (2005), "Celebration of Fools: An Inside Look at the Rise and Fall of JCPenney", Journal of Consumer Marketing, Vol. 22 No. 7, pp. 445-446. https://doi.org/10.1108/07363760510631219

Who knew or cared what was happening? “In 1994, after all, they had a record year of immense profit. The party was Texas‐sized, with praise and rewards all around. It was a ‘celebration of fools’” (p. 173).

When I saw the jacket covering the hard copy of Celebration of Fools, the author's background as a speechwriter and filmmaker was notable. I presumed the book would contain discrete press releases and short stories of the corporate history. Instead, Bill Hare presents a saga, in non‐fiction, that I did not want to put aside. He recounts the ups and then the downs of this leading department store chain from his own eight years with its executives and combines it with knowledge of others from JCPenney. Since the company tended to maintain an insular position in the retailing and business world, there was little for the writer to find externally. Thus, admittedly, Hare presumes his conclusions from many conversations. He makes it clear on that “the book concentrates on the major events that drove the company up … and down” (p. 3).

I enjoyed every page of this book. However, I showed it to a professor from a Texas university, who was unable to get beyond the first chapter – even though, ultimately, JCPenney moved its corporate headquarters to Dallas. Perhaps Hare's story had so much meaning for me because, in the '60s, for a short‐lived part of my career, I worked for Federated Department Stores. There were no first names in the JCPenney nor in the Federated vintage, when I reported to Mr Maurice Lazarus, the Vice Chairman of Federated and the President of Filene's, its Boston Federated store. At the same time, Mr Harold Krensky rose to be the successor to Mr Maurice Lazarus as the President of Filene's and then replaced Mr Ralph Lazarus, who is mentioned ion this book as the top officer of Federated. So, to me, the climb to the top was similar in the two famous organizations. In fact, as I read about a CEO of JCPenney trying to systematize its business by a secret, manual record of consolidated transactions, I was, in the same year, working on what sounded like the same project for Mr Lazarus. Similarly to Filene's, the people at the top of JCPenney rose from their ability in merchandising or strategy and overall vision; and their wives became a part of the interviewing process. In fact, James Cash Penney's wife was always “Mrs Penney”, even to him. For me, this was of interest in demonstrating the need for a company to establish a posture in consumers' minds, its human resources' development, and its contributions within surrounding communities.

To most readers, who are probably those with interest in retailing and management, either from experience or from study, Bill Hare presents a continuing and convincing argument in favor of the retail giant's founding fathers, beginning with J.C. Penney and continuing through Walt Neppl and Don Seibert, of the wonderful years that included success in acquiring personnel and training them in the JC Penney ways. In 1936, in Salt Lake City, at a company gathering of then 36 stores, Mr Penney introduced the “body of doctrine” of H‐C‐S‐C. He invoked this acronym, which represented Honor, Confidence, Service, and Cooperation (p. 37). As simplistic as it seemed, numerous CEO's followed this credo until the time of Bill Howell, the chairman and CEO, responsible for moving the company from New York to Dallas. The leaders, prior to Howell, followed the beliefs of both merchandise and merchandising, had the ability to withstand and ameliorate the differences among people at the store level and others at the buying level, held appreciation for a varied product mix – in spite of these managers leading the path to the malls of America – and showed foresight in attempting to computerize systems with leaders in the cash register industry. Mr Hare, at the other extreme, presents a convincing argument against those at the helm, beginning with W.R. Howell, and, especially Jim Oesterreicher. These top officers were “preening themselves” (p. 169), and pushing toward further self‐aggrandizement by acquiring the Eckerd Corporation, an unsuccessful venture into the pharmacy business.

It is not surprising that AMACOM published this book. In addition to retailing, it contains many management lessons. In the early years, Penney's management training endorsed leading by example. Employees moved up who followed the H‐C‐S‐C doctrine and the procedures that related to it. Hare explains the result of this philosophical underpinning by saying: “Remember, Penney was the godfather of sharing. If you produced, you did very well” (p. 15).

An important word from the beginning of James Cash Penney's regime was “partnerships”. After people of the Golden Rule Stores proved their worth, they received offers to become partners, a managerial technique that accounted for the stores' ability to thrive. They paid attention to the customers and provided the product mix important to those customers. Many years later, the top officers lost this objective and replaced it with profit.

In the center of the book, among glossy photographs, readers can see the James C. Penney Meat Market. Jim Penney's first venture failed because he would not pay bribes. The picture shows both Jim Penney and his beloved, Berta, who worked in the market where they met. Berta had arrived in Jim's hometown after deserting the location of her first marriage, which ended in divorce. She and Jim worked together in his first Golden Rule Store and, while he was away on a buying trip, Berta learned she was pregnant. Jim returned much later and, on learning of the pregnancy, proposed to Berta. She worked tirelessly in both the home and the business, keeping the baby's basket on the premises. When she needed to have her tonsils removed, she walked to and from the surgeon's office, and thereafter became very ill. Jim had planned a trip for the then family of Berta and two children because they never had a real vacation. However, Berta never recovered from her illness and Jim never recovered from the fact she was gone even when she died. This caused him to institutionalize himself much later in life. Fortuitously he did recover. Frugality did remain a major part of his life, as his tips were an embarrassment to those around him.

From a company that began around 1903 and that had no Jewish employees until the 1960s, it turned into a company that later claimed to be interested in equal opportunity for women and minority members. Long before this, the wife of one manager was rude and haughty to a woman salesperson. Another CEO soon thereafter tried to picture his own wife having to stand there all day for less pay than her male counterparts. Along came the upwardly mobile Gale Duff‐Bloom, who oversaw the successful movement toward equity. At the same time, Gale suffered hurt when she went to celebrate her achievements for women with the top officers. The men were whispering to one another before and during this jaunt, and, only on arrival, Ms Duff‐Bloom, learned she had to return to her office alone, as the men remained to play at this golf course that did not welcome women. The men, allegedly supportive of her efforts, did not leave and return with her.

A further personal frame of reference in the “Celebration of fools” led me to read about Dr Barton Weitz. Dr Weitz received the full respect of Gale Duff‐Bloom. When she arrived on his campus, she felt a pang of regret that she had, by her own design and demands, risen to the top without a formal, on‐campus college education. Barton is the JCPenney Scholar at the Warrington School of Business at University of Florida. Moreover, I agree with Duff‐Bloom's assessment of Professor Weitz, who was Chairman of the Board of the American Marketing Association, when I was its top officer of the collegiate division in 2002 and 2003. He is as bright, “amiable,” and effective as Ms Duff‐Bloom describes him.

Hare divides the book into four chronological parts:

1. 1.

   The founder;

2. 2.

   The visionary;

3. 3.

   The betrayer; and

4. 4.

   The end.

There are 27 chapter titles, which become apparent and appropriate as readers understand the text preceding each heading. For example, Chapter 9 bears the title of “The common touch”. This chapter describes the commonalities of JCPenney's top executives. Only one, Mil Batten, who was the fourth Chairman and CEO, never managed a store. He did train under and work with others in the organization and moved up until he retired to become the head of the United States' Securities and Exchange Commission.

Most chapters were under 20 pages. For me, not one chapter dragged and there was no redundancy. It is a read those in retailing and management should not miss.