James Cash Penney was an American businnessman and entrepreneur. He was the founder of the J. C. Penney Company.
Background
James Cash Penney was born on September 16, 1875 in Hamilton, Caldwell County, Missouri, United States. He was the seventh of twelve children born to Mary Frances Paxton and James Penney. Jim Penney first went into business when he was eight years old, after his father told him he would have to purchase his own clothes. Penney did odd chores and earned enough to buy a pair of shoes. He also purchased piglets, which he fattened and sold. The elder Penney, a Primitive-Baptist minister, impressed upon his son the importance of living by the Golden Rule, a principle that was to guide Penney throughout his business career.
Education
James Cash Penney graduated from Hamilton High School in 1893 .
Career
James Cash Penney worked on the family farm until January 1895, when his ailing father secured a position for him from a local storekeeper. John Hale of J. M. Hale and Brother hired Penney at $25 for the remainder of the year, an average of only $2. 27 per month. Six weeks after Penney started at Hale's, his father died. The final words to his son were, "Jim will make it. I like the way he has started out. " The remark deeply affected Penney and inspired him to succeed at the store. By the end of the year, he ranked third in sales. Hale rehired him at $200 per year and at $300 for the next. However, in 1897, Penney's physician advised him to move to a drier climate and to avoid indoor work. Penney moved to Colorado, working briefly in Denver before moving to Longmont, where he lost a butcher shop he purchased for $300 by refusing to give the local hotel chef, his biggest customer, a weekly bottle of whiskey as a condition of keeping the account.
Virtually penniless, Penney took a temporary position at a dry goods store owned by T. M. Callahan and Gus Johnson. He impressed the two and they gave him a permanent job at their Evanston, Wyoming, store. In 1902, Penney opened a new store for Johnson and Callahan in Kemmerer, Wyoming, using his own capital. Penney and his wife ran a successful cash-and-carry business in the windswept mining town, where his principal competitor offered credit and accepted the mine's scrip. Penney's operating costs were low, and he was committed to selling the highest-quality merchandise at the lowest possible prices. The store became an immediate success when it opened April 14, 1902. Penney soon earned a reputation as a hard worker and a demanding employer. In one month alone thirty-nine employees quit. Within two years Penney opened stores in Rock Springs and Cumberland, Wyoming. Three years later he bought out Johnson and Callahan's shares in the stores and became sole owner of the chain, which he renamed the Golden Rule Stores. Penney found a partner for his add-a-store chain idea in Earl Corder Sams.
In 1909, Penney gave up personal management of the Kemmerer operation and moved to Salt Lake City to expand the chain into Utah. Penney had high standards for his managers, or "associates, " as he termed all employees. He desired ambitious men of high moral caliber who neither smoked nor drank. Penney's partnership agreement with his store managers enabled them to receive one-third of the store profits, a powerful motivator. Penney and his partners later entered into a unique subrogation agreement that entrusted him to offer as surety all corporately owned assets to secure additional bank credit. This arrangement earned Penney the sobriquet "the man with a thousand partners. " In 1910, Penney's wife, Berta, died suddenly. A grief-stricken Penney displaced himself from his business in the West by spending as much time as possible in New York City.
In 1912, with thirty-four stores in eight Western states, Penney adopted the name J. C. Penney Company. In January 1913, the company was incorporated. As company president from 1913 to 1917, Penney proposed centralized buying for the chain, which would be based in New York. As the operation expanded, Penney employed junior partner-managers as buyers, each in a specialized area. All followed Penney's exacting standards. At the company convention in 1917, Penney resigned the presidency to become chairman of the board, thereby relieving himself of administrative details. He also said he wanted to erase the notion from his partners' minds, as well as his own, that he was indispensable. In 1927, the company went public. As chairman, Penney undertook an intensive tour of company stores. These experiences led him to create a training and education program for employees.
In 1922, Penney bought the 720-acre Emmadine Farm in Dutchess County, New York, which undertook agricultural research and bred prize-winning Guernsey cattle. During this period Penney also bought the Hale dry goods store in his hometown of Hamilton and opened it as the five-hundredth store in the Penney chain. Penney declined offers to merge with both Montgomery Ward and Sears and Roebuck. In 1925, Penney and New York Attorney Ralph W. Gwinn founded the Penney-Gwinn Corporation, opening Penney Farms in Florida, a partnership-farm experiment based on the same model used in his stores. The 120, 000-acre site housed an agricultural institute and in 1926 became the home of the Memorial Home Community, a retirement village for religious workers that he dedicated to the memory of his parents.
In 1923, Penney established the J. C. Penney Foundation under the directorship of Daniel A. Poling, editor of The Christian Herald, an interdenominational Protestant publication that soon became part of the foundation. The foundation undertook a number of programs directed at serving youth. On October 23, 1929, the New York Stock Exchange listed J. C. Penney Company stock for the first time. The stock market crash occurred six days later, and the price of the company's common share plummeted from $120 to $13. Penney borrowed heavily against his holdings to sustain the foundation and his other activities. His personal debts mounted, and he was forced to sell his 360, 000 shares in the company to satisfy creditors. He also curtailed his charitable activities. By 1932, he had lost most of his $40 million personal fortune. The stress associated with the situation deeply affected Penney. A physician friend diagnosed him with an aggravated case of shingles and ordered him hospitalized.
Penney entered a Michigan sanitarium, where one night he was so convinced death was imminent that he wrote farewell letters. Renewed religious faith saw him through continuing adversities, and the Penney corporation survived and even expanded modestly. He was gradually able to rebuild his finances, in part by accepting for the first time a salaried position, as chairman of the board, from the company that bore his name. He remained active in company affairs and kept five full-time secretaries busy at the New York headquarters answering his correspondence. A reception four days before Penney's ninety-fifth birthday was attended by some five hundred friends and relatives. Penney died in New York City on February 12, 1971.
Achievements
James Cash Penney was a successful retail businessman from Missouri. He founded the J. C. Penney Company, a nationwide chain of stores that sells a wide variety of products.
James Cash Penney strongly believed that stores should be run with honesty and a deep respect for the customer. He was deeply concerned with spiritual values and often lectured in his hoarse matter-of-fact tone on "the application of Christian principles in business. "
Quotations:
"As a rule, we find what we look for; we achieve what we get ready for. "
"Growth is never by mere chance; it is the result of forces working together. "
"The best teamwork comes from men who are working independently toward one goal in unison. "
"The five separate fingers are five independent units. Close them and the fist multiplies strength. This is organization. "
"The friendly smile, the word of greeting, are certainly something fleeting and seemingly insubstantial. You can’t take them with you. But they work for good beyond your power to measure their influence. It is the service we are not obliged to give that people value most. "
Membership
James Cash Penney was a member of Alpha Gamma Rho and Alpha Kappa Psi.
Personality
In his later years, James Cash Penney, wearing his trademark bow tie, spent much of his time speaking and promoting various charitable causes.
Interests
Outside his business, James Cash Penney's interests mirrored his upbringing — religion, education, and agriculture. He built a retirement home for ministers in Florida, he underwrote vocational guidance programs on the radio, and he raised purebred cattle on his two farms, one in Missouri, the other in New York. He took out bank loans to finance his philanthropy, using company stock as collateral. In the last decades of his life, James Cash Penney was a popular speaker and a respected author.
Connections
On August 24, 1899, James Cash Penney married Berta Hess, whom he had met in Longmont. They had two children. In 1910, Penney's wife, Berta, died suddenly. In 1919, Penney married Mary Hortense Kimball. They had one child. Penney's second wife had died in 1923, and in 1926 he married Caroline B. Autenrieth. They had two children.
