On June 5, 2017, Mickey Drexler, the then-J.Crew CEO of 14 years stepped down from his role as CEO. Drexler, who was practically synonymous with the brand, along with then-creative director Jenna Lyons, was replaced with Jim Brett, the former president of West Elm, where he oversaw a successful modernization of the brand. Faced with J.Crew’s slumping sales, Brett famously said that, “[if] I fail, I’ll have failed by my own hands,” as he took over the company.

Fast forward less than a year and a half and Brett is already out of a job, after he and the board were “unable to bridge [their] beliefs” on the path forward for J.Crew. The path mirrors what happened to Ron Johnson, the famous builder of Apple’s retail empire, after he took over a struggling JCPenney in 2011, only to be fired less than 18 months later. (Ironically, Drexler, who shows up everywhere in the retail world, sits on the board of Apple and suggested Johnson to Steve Jobs back when he was hired in 2000.)

Turning around a brand or retailer with a billion or more in sales is no easy task. A company that is public or has private equity backers only makes it harder. But what about the distinct challenges these men (which is a problem in and of itself) faced? Were they not given a real chance to make a difference, did they err in their efforts, or was it some combination of the two?

At West Elm, Brett empowered local retail teams, redefining the merchandise mix around both mass-produced and craftsman-made items, in addition to expanding into hospitality with West Elm hotels. Sales almost tripled during his tenure to nearly $1 billion.

Years earlier, Johnson helped Jobs build Apple’s retail fleet out from a mockup in a warehouse. Within two years, the company recorded over $1 billion in retail sales, beating a record set by Gap (helmed at the time by none other than Drexler). Apple would go on to set the record for the highest sales per square foot, often topping out above $5,500 (Tiffany’s stores take in about 40% less). It also became the biggest anchor tenant for malls, often raising a given property’s net sales by 10%. Apple now records close to $50 billion in offline retail sales annually.

In each scenario, both Brett and Johnson knew what they were doing and had the credentials to back up their decisions. But past success is never an indicator of future success, especially when it comes to turnarounds, which are dependent on a multitude of factors, spanning identity and relevance, communication and time.

Identity & Relevance

At their peak, both J.Crew and JCPenney had specific and desirable identities, and it’s not a coincidence that Brett and Johnson ultimately failed to evolve these identities while restoring the previously successful financial results that came with them. JCPenney was inseparable from discounting, which was insanely confusing and inflated, but convinced customers they were scoring solid deals. However, Johnson eliminated this strategy, replacing it with “Every Day” pricing, which was discountless, but actually cheapened prices more than before. Customers either didn’t notice or didn’t see “Every Day” pricing as a welcome change, revolting against the change, which eliminated the discounting psychology.

When Brett joined J.Crew, the brand’s identity as a mid-market, quality retailer left it exposed to price pressure, both from the rise of fast fashion, which was stealing consumers and training them to reject J.Crew’s premium, and the advent of digitally-native and direct-to-consumer and luxury brands, which were delivering more for less (digitally-native) or more for more (luxury). Brett realized that J.Crew could not stay put, deciding to move the brand down market when it came to basics, creating more inclusive sizing, diversifying product options, including more artisan products (à la Brett’s time at West Elm) and wider distribution, which brought the brand’s products to Amazon and Nordstrom, among other retailers. Some of these moves reportedly caused further fissures with the board, as Drexler was a big opponent of selling on Amazon when he was CEO.

Communication

In large companies with tens or hundreds of thousands of people who report up to the person in charge, communication is essential, especially when one is trying to change how an organization works. This is one of the areas where Johnson was faulted for being too bold and not communicating enough, prohibiting the team from realizing his mission. Brett didn’t have any major missteps in this department when it came to public communication, but the way his tenure ended shows that he wasn’t able to convince the board or those beneath him that his proposed path forward held promise. The paradox of leadership is that the leader is doing close to none of the work involved in actualizing his or her vision—it takes an army of people beneath him or her to carry it out. If they aren’t on board, it doesn’t matter how good the plan is.

Time

Time is one of the most important factors and where public companies or debt-ridden private ones run into huge problems. Turning around a company like J.Crew, with almost 600 stores and 10,000 employees, or like JCPenney, with 900 stores and nearly 100,000 employees is a feat. Everything takes more time and is met by more resistance, which, in turn, requires more patience on the board level to see improvements. Add hundreds of millions of dollars of soon-to-be-due debt (J.Crew) or a tanking stock price (JCPenney) and the problem compounds while runway decreases, hindering the turnaround process.

In both cases, neither leader had enough time to enact his plans. J.Crew only just started to see rising sales—over a year after Brett took the helm—while JCPenney lost almost $5 billion in sales in the three years Johnson was at the forefront.

What founder Michael Dell has done in the past few years for his eponymous technology company offers an alternative path. Dell, which was a public company, announced in 2013 that it would go ahead with a $24.4 billion leveraged buyout deal to take the company private, which gave it more time and leeway to rebuild the business outside of the public spotlight. This summer, the company said it plans to return to the public markets via a complicated deal that won’t require it to IPO, but would value the company at between $60-$70 billion—more than two times its value in the buyout. In the past few years, Dell has transformed from a computer hardware maker to one that aims to sell businesses a range of IT services, including hardware and software. Since the buyout in 2013, revenue has increased from $57 billion to $78 billion in 2018. While it’s too soon to know if this will all work out in the long term (and there is a lot of complexity in Dell’s deal to return to the public markets), the point stands that sometimes one has to get out of the spotlight to make the changes necessary to survival.

The same goes for Angela Ahrendts tenure at Burberry, where she took over a brand that has mass-market licenses (at the time, the brand had 23) and restored the luxury DNA of the brand while bringing it into the digital age. Between 2006 and 2012, Ahrendts pushed the brand up market and diversified beyond Burberry’s check-pattern aesthetic, while also bringing fragrance and beauty product licenses back under corporate control. The company went from under £800 million in revenue to around £2 billion by the time she left. Ahrendts had the luxury of time to implement her efforts, possibly because the market was different at the time and investors (the brand is publicly traded) had more patience back then, or because it’s easier to bring a brand up market for wealthier customers than it is to bring it down market, like J.Crew is trying to do now. As further proof of the small world of retail, Ahrendts now leads Apple’s global retail efforts.   

Going Forward

At the end of the day, the success of potential turnaround is an alchemy of factors. But while they are some of the hardest feats to pull off in the business world, they are possible—Apple, Best Buy, Marvel and Lego show that it can happen.

Even so, boards that are tasked with the fiduciary duty of the company they serve should be doing everything in their power to see turnaround efforts through—and patience is a must for everyone involved. The goal should be optimize for the false negative (trying something, even though it might not work) versus the false positive (not trying something, which means you will never know if it could have worked). After all, going back to the same blueprint—as JCPenney did and as J.Crew will likely do—and expecting different results is a fool’s errand.

J.Crew and JCPenney are cautionary tales about what happens with a lot of ambition and not enough time. Hopefully the next turnaround effort for a company going through challenging times will heed lessons from Brett and Johnson’s tenures, and come out better on the other side. Otherwise, the company will join the graveyard of failed turnaround efforts.