Trouble Afloat for Macy’s

 Trouble Afloat for Macys

THE PR VERDICT: “D” (PR Problematic) for Macy’s Thanksgiving Day Parade.

One of the great traditions of Thanksgiving in America is watching the Macy’s parade. Marching bands play, celebrities perform and a cadre of inflatable balloons delights the nation.

Among the floats this year is one by Sea World – now a target of animal rights activists. A highly-praised documentary, Blackfish, enlightened viewers about the lives of orcas kept in captivity at Sea World. Animals rights group PETA mobilized forces against Sea World, including a protest demanding Macy’s exclude Sea World’s float from its parade.

Macy’s response: “The parade has never taken on, promoted or otherwise engaged in social commentary, political debate or other forms of advocacy.” Tried, true, staid – but likely the protests will go on.

THE PR VERDICT: “D” (PR Problematic) for Macy’s Thanksgiving Day Parade.

THE PR TAKEAWAY: Be consistent. Macy’s has little choice but to give the pat “We don’t get involved in controversy” statement. If they give in to one group, they’d have to give in to another… But wait they already have! Sponsors of the float for South Dakota balked at singer Joan Jett performing on their parade entry because, as a vegetarian and PETA member, she was unsuitable to represent a cattle ranching state. Macy’s gave in and moved Jett to another float. Macy’s is now on a collision course with new groups who are likely be offended by future. Stay clear and don’t get involved. Placating all parties can ultimately sink an entire parade.

J.C. Penney: Everything Old is New Again

 J.C. Penney: Everything Old is New Again

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.
(Pictured: ousted CEO Ron Johnson.)

Shareholders may be asking the board of J.C. Penney “Penny for your thoughts?” Or perhaps demanding it, after the startling news of a CEO switcheroo this past Monday. That CEO Ron Johnson was ousted is not a surprise. The real surprise came when the board announced Johnson’s replacement: his predecessor, Myron Ullman, who was fired by that same board in 2011.

When Johnson arrived he moved forward with a radical makeover for Penney: boutique stores under one roof. This idea included securing Martha Stewart, who assured Johnson she could step out of her exclusive contract with Macy’s. That plan blew up like a bad soufflé, with Johnson in court admitting he’d never read the fine print of Stewart’s contract with Macy’s, and thousands of Martha’s products being court-barred from shelves.

Now comes news that Johnson is being replaced by the very predecessor he took over from, ostensibly because the man wasn’t doing a bang-up job to begin with. JCP’s price tumbled 10.3 percent after a brief spike when Johnson’s termination was announced. Shareholders aren’t just calling for a replacement for him, but for the entire board. This is practically a textbook example of PR “dont’s.”

THE PR VERDICT: “F” (Full Fiasco) for the board of J.C. Penney.

THE PR TAKEAWAY: When playing poker, keep your hand facing in – no need to show all cards to the other players. A new CEO, a drastic new plan; where were the checkpoints along the way? With only one of the ten J.C. Penney board members having retail experience, no wonder the organization is in trouble. The board clearly realized that it needed to oust Johnson to stem the falling revenues and bad publicity, but the answer is rarely to go back in time. As Plan B is nothing more than a return to former issues, then it may be worth delaying until a more palatable alternative is found. If the board insists on reuniting with a former CEO, then coach the ill-chosen replacement not to admit that he was re-hired only last weekend and has no plan to speak of. Showing the losing hand is always a losing tactic and in this case, likely to cost JCP a pretty penny.

More Trouble for Martha Stewart: Not a “Good Thing”

 More Trouble for Martha Stewart: Not a Good Thing

The PR Verdict: “D” (PR Problematic) for Martha Stewart and J.C. Penney.

Martha Stewart has had more than her share of embarrassing public moments lately. Two of her offshoot magazines had to be co-opted into her regular publication, Martha Stewart Living, due to poor newsstand sales. And yesterday, the head of Macy’s department stores, Terry Lundgren said that Martha made him “sick.”

The cause of Macy’s CEO upset wasn’t Martha’s recipe for dinner, but rather her recipe for success. Stewart allegedly phoned Lungdren in December 2011 to tell the CEO that she’d inked a merchandising deal with rival retailer J.C. Penney. This took Macy’s by surprise. Lundgren thought their deal, struck in 2007, to sell Martha Stewart cookware, bedding, and other products was exclusive. “I was completely shocked and blown away,” Lundgren testified at a court hearing this week,  “I was literally sick to my stomach.” He further testified that Stewart claimed in their phone call that the deal with JC Penney would be good for Macy’s. At that point Lundgren hung up on Stewart.

JC Penney claims the deal was vital to their rebranding and vital to Martha, who also sold them 17 percent of her company. But the legal question and PR problem is how did Martha think she might get away with the deal to sell her home products through a department store, when she already had a deal to do just that.

THE PR VERDICT: “D” (PR Problematic) for Martha Stewart, and for J.C. Penney; Macy’s has now won a court injunction to temporarily block Penney’s from selling Martha Stewart products.

THE PR TAKEAWAY: Business is cutthroat, but reputations can be preserved by being above board. Sure, everyone loves a dramatic under-the-table deal – in the movies. But in real life the dealmaker comes off as untrustworthy and from the PR standpoint, desperate. Stewart already had publicly-known problems with her corporation; JC Penney’s flagging sales have led to a massive and risky revamp of their stores. Each party needed the other, and each had to know that Macy’s wouldn’t take this lying down, not even on 400 thread-count percale sheets in Blossom Yellow. The repercussions will illustrate yet again that there is such a thing as bad publicity.