Penney pinched

Falling sales and claims of sexist, insular management plague Plano-based J.C. Penney. Can a woman -- from Wal-Mart of all places -- turn the troubled chain around?

He was blatant, according to Baker. "I remember one time I was sitting at the table with him at the Penney Golf Classic...His wife was across the table, and I was seated next to him, and he was rubbing my leg. The man is just a pig, and I'll just leave it at that. But...I've been around the company a long time. Just blow it off and move on."

Even her bid to get Penney to sponsor St. James led to a confrontation with Hutchens. At an award ceremony put on by the Women's Sport Foundation after the company started backing St. James, several top J.C. Penney male executives, including Hutchens, left the event early, abandoning Baker and another female executive. "The men had left the function to watch a ballgame," Baker recalled. "It was kind of embarrassing, because we were the front tables of the room."

Hutchens asked her later that evening to come to his room in the corporate apartments so he could explain the sudden exodus. "I knocked on the door...He said, 'Come on in,' and when I went in there, he was there with shirt...and...bow tie on in his underwear rubbing his leg. I said, 'Tom, we'll discuss this when we get back.' I just left."

Falling sales and claims of sexist, insular management plague Plano-based J.C. Penney. Can a woman -- from Wal-Mart of all places -- turn the troubled chain around?
Hadley Hooper
Falling sales and claims of sexist, insular management plague Plano-based J.C. Penney. Can a woman -- from Wal-Mart of all places -- turn the troubled chain around?
"These chaps were  simply demoted, but you were fired in summary dismissal. Can you make any sense out of this?" Baker's lawyer asked her. "They were men,"  she said.
Hadley Hooper
"These chaps were simply demoted, but you were fired in summary dismissal. Can you make any sense out of this?" Baker's lawyer asked her. "They were men," she said.

Why hadn't she filed a sexual harassment suit against Hutchens years ago? her lawyer asked. "I didn't survive for 30 years by running to somebody every day," she said. "He didn't affect my position. I never reported to him. He was harmless. When these encounters happened, he was drunk...that's his reputation."

When Baker learned in late 1995 that she would be reporting to Hutchens, she had another uncomfortable run-in with the top Penney executive. "He put his arm around me and said, 'I'm finally going to get you under me, aren't I?'" Baker said.

Weeks before Baker was fired, she was told that she had crossed Hutchens and that he allegedly had targeted her. She had aligned herself politically with Hutchens' rival in the company, John Cody Jr., the former chief operating officer. Cody last January and declined to be interviewed for this story.

Oesterreicher had put both Cody and Hutchens in line for what amounts to the No. 2 job at J.C. Penney. Cody had mentored Baker, and in early 1996 he asked whether she wanted him to try to move her to a store management position. Executive slots were going to be reshuffled, and she would benefit in terms of a promotion if she had top-level field experience.

Soon afterward, Randy Ronning, now president of catalog and logistics, told her that Hutchens was livid, Baker testified. "He said, 'You're in cahoots with Cody against him, and he's furious with you, and I don't know what I'm going to do to calm him," she said. "You don't want to tick Tom Hutchens off. He can be a very mean person.'"

Shortly after that, Baker was asked to participate in an audit of her division. Her subordinates had mistakenly included three extra days in their sales totals that belonged in the next year. The false increase meant the division would meet sales quota requirements and get bonuses. Without the additional days counted, they would not.

Only a few days before those allegations arose, the CEO had distributed a memo praising Baker for transforming the custom-decorating department into a $10 million profit center.

Three years later, arbitrator Steve Rusuck would conclude that Baker did not knowingly or willingly falsify records.


In the end, J.C. Penney fired a successful female manager for no apparent reason. Meanwhile, the man she accused of sexually harassing her has been moved into a job that paid him $630,000 last year.

It's worthwhile to note -- for those hoping that the newcomer can work miracles on the bottom line -- that Castagna and Hutchens are comparably ranked on the corporate ladder.

At the telephone conference with stock-market analysts this week, Castagna sounded truly exasperated even before the questions began. "My first 90 days at J.C. Penney have truly been challenging," she said in her opening statement.

The sigh that followed made one think she truly meant it.

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