Written on Friday, November 23, 2012 by David L. Goetsch
Investors are jumping ship on J.C. Penney in droves in response to CEO Ron Johnson’s new “every-day-low-prices” strategy. However, to be fair Johnson inherited a company that was already in trouble, and the trouble had nothing to do with pricing. J.C. Penney’s trouble actually began when it ignored the values of its customer base and began supporting the radical homosexual agenda. Former CEO Michael Francis decided to make a statement about same-sex marriage and use the prestige of J.C. Penney to give his statement validity. He could not have done a worse job of anticipating the unintended consequences of his actions, actions that cost J.C. Penney investors millions of dollars and threatened to drive the company into bankruptcy.
In deciding to support the radical homosexual agenda Francis must have thought, “With the support and approval of the mainstream media, how can I go wrong?” He can be forgiven for thinking that having the assistance of the mainstream media would be enough to ensure success in his effort to make a positive statement about same-sex marriage. After all, hadn’t the radical homosexual movement established a successful track record of using the mainstream media to bludgeon opponents into supporting its agenda or at least not opposing it? Maybe the mainstream media would have a similar influence on J.C. Penney’s customer base.
If this was the assumption of Michael Francis, he misjudged both his customers and the effect of the media on them. He hired comedienne Ellen DeGeneris, a homosexual and same-sex marriage advocate, as the company’s national spokesperson. On Mother’s Day 2011, J.C. Penney shocked its customer base—people who, for the most part, still hold to traditional American values—with an intentionally provocative, same-sex marriage ad featuring a family with two “moms.” Then in spite of a tidal wave of protests from customers, the retail giant obstinately ran a similar ad on Father’s Day featuring a family with two “dads.” Francis quickly learned what happens when businesses ignore sound business practices in favor of political ideology.
Customer response to J.C. Penney’s in-your-face endorsement of homosexuality was hard for even the most ardent ideologue to ignore. Following the controversial ads, the company posted a $163 million loss, saw its stock price drop by 8.8 percent, and endured a 10 percent decline in customer traffic. CEO Michael Francis was fired for ignoring a rule retailers learn in Business 101: Know your customer. J.C. Penney has always appealed to a conservative, middle-American customer base. The store was founded on traditional America values, and the majority of its customers still subscribe to those values. When J.C. Penney walked away from its founding values, customers who still subscribe to those values walked away from J.C. Penney.
New CEO, Ron Johnson, was brought in to fix the problem, but he quickly learned that his predecessor’s misguided support of the radical homosexual agenda had left him with a larger than expected mountain to climb. Another truth that every business leader must understand—and apparently Ron Johnson didn’t—is that when a business gets at odds with its customers, the disgruntled customers talk to friends and they, in turn, talk to friends and soon the “piling-on effect” comes into play. There is a lesson in this for other businesses that feel the need to pander to the radical homosexual movement.