It is incredible how true it is that a good or bad executive team can make all the difference in a company’s success.

Here is one story that shows what a difference the resourcefulness of the executive team of one business has made for two businesses.

You see the results of that difference every time you visit Greenville’s Haywood Mall.

Malls are supposed to be passé.  They are out of fashion.  Their day is supposedly gone forever.  The Greenville Mall was an utter failure, and was ultimately torn down – cleared away; reduced to rubble and bare earth.  In its place was constructed the stand-alone stores of Magnolia Park – what was called a “shopping center”, back in the 1960s.

But just a mile away, Haywood Mall remains an ongoing success story, forty years later and still going strong.

What’s the difference?

Haywood Mall is owned and operated by the Simon Property Group (stock symbol “SPG”, if you are interested – and you should be).  

For most of that time, Haywood Mall has had five anchor stores – big, multi-story department stores:  Dillard’s, JC Penney, Macy’s, Sears, and Belk’s.  

Sears has closed, a victim of its own mismanagement and the post-merger executive team of the combined Sears and K-Mart.  No doubt Haywood Mall is looking for a replacement.

In September of 2020, JC Penney was in bankruptcy court, on the verge of liquidation.  For a decade or more, it had been cutting corners, at the expense of product quality; JC Penney was on the decline; on the downhill slide into oblivion.  Its unremarkable executive team had lost its edge; it was unwilling or unable to devise a strategy for attracting customers back to the store and for finding a way to begin its recovery.

Anchor stores are crucial to a mall’s success, and Simon Property Group knew it.  Without JC Penney, Haywood Mall and a number of other malls they owned would be in trouble; they would be unable to attract the smaller stores needed to fill out the mall.  Empty store fronts mean fewer shoppers attracted to the mall; decline is inevitable and ultimately fatal.

The Simon Property Group executive team came up with an audacious, financially daring solution:  buy JC Penney and put a new, more ambitious, more dynamic executive team in place.

It would be a long, slow road to recovery:  customers who had walked away from JC Penney’s declining product quality over the years would certainly be slow to return.  Worse, some would have found a competitor and would now be unwilling to change.  Inertia worked against Simon Property Group’s efforts.

But the Simon Property Group executive team was determined to do what was needed to be successful.

If you walk through JC Penney now, you can see the change; the store’s environment feels better.  The store looks brighter, the clothes and other products they offer for sale are presented in a more attractive manner.  You find yourself enjoying your time in JC Penny.  

And the quality is returning.

If you drop by the management office of the JC Penney store at the Haywood Mall, and mange to catch the store manager at her desk, and ask her how the store is doing, she will be hesitant and non-committal, at first.  After all, who walks in like that and asks that kind of question?  

But if you explain that you hold (or are thinking of buying) Simon Property Group stock, and that you were walking through the JC Penney store to see how good everything looks and to gauge the success of the store’s attempted recovery, she may open up enough to chat a bit more openly.  

Then you will learn that she has managed the store since its previous decline.  She had helplessly watched the chain’s fall from grace.  And now, with the changes brought about by the Simon Property Group, she is once again working to be successful.  She is enjoying her job.  

Clearly the new JC Penney executive team wants to put forth the needed effort to succeed, and is once again instilling that drive in its management team and its employees.  

The Bottom Line

As you watch from out in the mall, JC Penney is attracting customers again.  Shoppers no longer just pass the store by.  And true to Simon Property Group’s ambitious hopes and goals, those customers visit Haywood Mall’s other stores as well.  

Saving JC Penney has helped Haywood Mall survive.

That is the power of a good executive team.

Postscript:  The Real Bottom Line

The story of JC Penny and Simon Property Group also explains why capitalism will always beat socialism.  

In a capitalist economy, success rewards those driven to make whatever effort is necessary to attract customers.  

In a socialist economy, bureaucrats only strive to get good performance reviews from supervisors – a formula that guarantees a mediocre result. 

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