Some of you may remember the time some years ago when The Coca-Cola Company (NYSE: KO) changed the formula of its Coke soda. Lovers of the brand revolted en mass, and Coke was forced to return to the original formula.
It was only a year ago that Ron Johnson began changing the formula for J.C. Penney Co. Inc. (NYSE: JCP). Lovers of the Penney brand have revolted by shopping elsewhere, and the declining sales reported by the company are staggering. For the year, the company reported a drop in sales of $4.3 billion, to $13 billion.
Let that sink in: A decline in sales of $4.3 billion.
Forbes' blogger Walter Loeb wrote this about the numbers: "In all my years, I have never seen a loss of momentum of these proportions. It is clear to me JCPenney lost its core customer during the transformation."
I was one of those core customers. I still remember shopping with my mother at the JCPenney store in downtown Shelby, where I grew up. And I stayed loyal to the company – quality goods at a decent price. That is, until a year ago, when Penney dropped its strategy of sale after sale after sale.
Johnson, who won kudos for building the Apple Inc. (Nasdaq: AAPL) store concept, threw it all out the window and, overnight, ripped the soul from a venerable company. When changes began, I wished him well, but I had my doubts.
Is it too late to change?
Probably, but change would have to be radical - not incremental. Coke didn't win back its customers by tweaking the new formula it introduced. It won back its customers by going back to the old formula.