CREATING AN AMERICAN INSTITUTION: THE MERCHANDISING GENIUS OF J. C. PENNEY
This life and times biography of the merchant J. C. Penney (1875-1971) focuses on his role in creating the nationwide chain of J. C. Penney Company dry goods stores between 1902 and 1935. The study ends in 1935 when Penney was sixty years old. He had just survived a dramatic reversal of his personal fortune; the Company he founded and guided throughout its formative years flourished due to its sound fiscal and merchandising policies. The study is based on James Cash Penney's extensive business and personal papers, on J. C. Penney Company early business records and on other published and unpublished sources. Material from local history sources and information from visits and interviews are included. Describing Penney's Baptist and Populist roots, the early Golden Rule Merchants' retailing system, and the step-by-step creation of what became an American institution and household word by the mid-1920s are the aims of the biography. By the mid-1920s the Company was accepted as the largest dry goods retail chain in America and the world. It was America's first nationwide department store chain. Penney would later be recognized as one of the six greatest merchants in American history. People who influenced him included his parents, high school teachers, his first wife, Berta A. Hess, his Golden Rule Store mentors, Thomas M. Callahan and William Guy Johnson, several ministers, including Dr. Francis B. Short and Dr. Daniel A. Poling, and an educator and lecturer, Dr. Thomas Tapper. Penney's business philosophy, based on the Biblical Golden Rule, was a logical outgrowth of his childhood and his mentors' application of the precept to retailing. Penney's father was a strict Old School Baptist minister, a dedicated civic leader, Populist politician and a farmer with a heavily mortgaged farm. His mentors' policies included cooperative buying through what was known as the Golden Rule Syndicate, low prices and cash-only sales. There were small chains of Golden Rule Stores scattered in the west and mid-west in the 1890s. They used partnerships to expand. The "foundation principles" of Penney's chain were (1) the Golden Rule principle and (2) potential partnership. How they preserved the partnership idea, and the evolution of centralized departments such as buying, accounting, educational, personnel and advertising are documented. Starting in 1917 Penney concentrated on employment, leadership development and employee training. Penney's ability to grasp the essence of others' ideas, implement them and create new combinations explains much of his success. The Company's unusual form of incorporation in 1913, the development of a remarkable in-house publication in 1917 and business training correspondence courses by 1921 demonstrate some aspects of Penney's genius. Cash-only, low-price policies, good quality merchandise, and continued reliance on the local managers' initiative were equally significant in the rapid growth of the chain. The biography traces the importance of "service" as the Company's primary goal, and shows how World War I era events led to expansion during the 1920s. By 1930 there were 1,400 stores in the chain as compared to 48 in late 1913. During these years a complex, sophisticated system was created to provide direct, simple service to millions of customers. Changes in incorporation, employee benefits, labor union policies and challenges from other firms and the "Chain Store Controversy" are discussed. The biography includes Penney's involvement in Florida agricultural, financial and philanthropic activities. How he survived financial disaster in the 1930s completes this study of an entrepreneur who left his small Missouri home town in 1897 and sought his future in the west.