"It just ain't the same, always unchanged
New days are strange, is the world insane?"
- Black Eyed Peas
Ted Leonsis (above), is a very very wealthy man and along with that wealth, often comes an even more impressive resume. Just to give you a glimpse, the man owns the Washington Wizards and Capitals (two sports teams), has written a best-selling book, produced movies, a former executive at AOL in its early days, and a former board member at American Express. Did I mention, he's also a partner at venture capital firm Revolution Ventures? This is where the problem lies: Leonsis is a board member at Groupon AND he works for Revolution who's an early investor in Groupon's biggest competitor, LivingSocial. The tech world is very small and information can pass through very quickly from a board meeting to another start-up without much monitoring. Remember just a couple months ago acclaimed VC titan John Doerr was rumored to be mole-ing around Silicon Valley during some employee bidding between Twitter and Google (he has a stake in both companies). Doerr also happens to be an early investor in Facebook and Google, two competitors. What am I getting at? The fact that there are so many tech startups VC investors want a piece of, that more often than not, they'll end up investing in companies who at some point become competitors, it's inevitable. Especially because of this Web 2.0/Social Media revolution we're in the middle of. Leonsis' situation is a tad different than that of Doerr's. Per Silicon Valley Insider, Revolution invested in LivingSocial before Leonsis joined the firm. Going forward this situation could get worrisome for Groupon who is trying to stay on top of the Coupon buying business and hopefully at some point become profitable.
J.C Penney's shares are up around 17% today, why? Some guy named Ron Johnson was named CEO and he simultaneously invested $50 million into the company. Johnson is a retail legend, first having worked at Target and establishing their soft clothing line and making Target a premier clothing and food destination. And in 2000, Steve Jobs asked him to join Apple to lead their retail business, he did just that. There are now Apple stores in 300 different locations and the international scale is just growing. Apple made $3.19 billion off the retail stores in the quarter ending in March alone. Wowzer. Johnson helped create a trendy, fun, and profitable retail business all across the world that makes people excited to visit a store, regardless if they're looking to buy something or not. Everything from the design to the actual hardware at Apple stores is a sight to see, as you all know.
Why do you think Johnson left a company who seems to be getting bigger and bigger each decade at a market cap of $307.3 billion? I have a couple reasons for you. One, I think the uncertainty of Steve Jobs's health doesn't sit well with Johnson. Jobs IS Apple and without him leading daily operations, it's hard to come up with the next Ipad or IMac computer. Tim Cook, who is currently running Apple, is capable of being a good CEO and he has stepped in during multiple occasions the past five years when Jobs could not, but he's no Steve Jobs, no one is. Another reason Johnson left is because Apple's stock or value has sort of been stagnant for the past 3-6 months. Since Johnson joined Apple's retail team, the stock went from $40/share to $332/share as it is today. This is a pricey stock and it will be hard for Apple to continue that type of growth without focusing on international markets. Apple has flooded the US, it needs that same success in Europe and Asia if the stock looks to increase significantly in the next coming year.
At J.C. Penney, Johnson gets to start from scratch again. He's now back in retail in a department store environment that is very similar to Target (or Dayton Hudson when he joined them) but he'll get a chance to add that sexiness to J.C. Penney that Apple has created the past decade. The magnet type effect that pulls you into their stores to see their new products and feel the aura of their stores. If J.C. Penney can do that, it will be huge. Nordstrom and Bloomingdales have brand names at their stores that are able to attract people. And some people can't afford to buy utilities at the Apple store, but everyone needs clothing, especially at a good price. J.C. Penney's stock price is at $35/share right now and with a market cap at $17 billion, the company has significant room for improvement in the next coming years.
USA Today mentions how J.C. Penney is facing increasing competition from places like Macy's and Neiman Marcus on the high end, and Target and H&M on the cheaper end. With mobile becoming more popular, Johnson will be looking to get those trophy wife afternoon shoppers to be more tech savvy and make it easy for them to find out about sales or store updates. Johnson was the one who introduced the Genius Bar at Apple stores where customers can get assistance with their Ipad, Iphone, etc. Myron Ullman III who took over as CEO in 2004 didn't damage the company, but Ron Johnson will be adding a whole lot of sexy to a J.C. Penney store near you.
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