Frmr JCPenney CEO: Johnson Must Listen to Customer

Renowned for running some of the nation's biggest department stores, Allen Questrom is concerned by what he sees happening at JCPenney .

Although he's currently a senior advisor at Lee Equity Partners, Questrom once occupied the corner office at Penney's.

And in a live interview on CNBC's Fast Money Halftime Report, Questrom tells us he’s shocked by the changes he’s seeing at his former company.

“Clearly the first part of Johnson’s strategy - elimination of coupons and sales - was a failure,” he says.

And Questrom isn’t just saying that because under his tenure Penney’s held sales, he saying it because he feels Penney’s customers want sales.

“Johnson may believe in the everyday low price strategy but the customer doesn’t. It goes against the grain.”

Questrom also tells us the jury is still out on the second part of the strategy – re-doing all the stores.

Under Johnson, JC Penney is dramatically changing its selection of brands and the store experience. As of Aug. 1, the chain began installing shops for Levi's and its Arizona brand. The goal is to eventually install 100 shops inside the stores that will replace the sea of mixed clothing racks typical of department stores. It also plans spots in its stores called Town Squares, similar to Apple's Genius Bars, which will offer services and advice.

“But what really surprises me is that they’re not really testing it. It doesn’t feel like they’re listening to the customer,” says Questrom.

Posted by CNBC's Lee Brodie

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