Motley Fool Hidden Gems Investing · Sep 27, 2026 · 26m · 16m saved
With Ron Johnson, author of Shop Different, creator of the Apple Store, former SVP of Retail at Apple and former CEO of JCPenney
When Ron Johnson left Target for Apple in late 1999, Apple had 5% of the personal computer market and Microsoft had 95%.
Venture capitalists were predicting that the internet would make stores obsolete. Steve Jobs decided Apple needed its own stores anyway, and hired the Target merchant who had brought designer Michael Graves to Target's shelves to build them. Johnson's rule for the stores was to sell nothing.
"We're going to serve our way to significance, and that's significance in their lives."
Ron Johnson, who built the Apple Store alongside Steve Jobs and later ran JCPenney, told Motley Fool Hidden Gems Investing about the early bet on Apple retail, what Apple's new CEO should and should not do, and his own failed turnaround at JCPenney. His new book is Shop Different: How Retail Revealed Apple's Genius.
The full interview is covered here so you can skip it. 26 minutes of audio, 10 minutes of reading.
Here are the 7 insights that matter.
Key Takeaways
Apple's executive team never discussed the stock price, Johnson said; profit was the result of the products, not the goal
Apple has gone from 25 million users to nearly 2 billion, so it cannot double again by doubling its customers
John Ternus does not need a new device to replace the iPhone, and should not be in a hurry
Apple is behind on AI, but the new Siri in iOS 27 is "much, much better," and privacy is its advantage
Target's CEO wanted to test Michael Graves with 3 items; Johnson launched with 140
At JCPenney, the vision was not the problem; the execution was, and Johnson says he would not hire himself for a turnaround
1. Why Retail, Not Banking
Johnson grew up in a Minneapolis suburb where Target's parent, Dayton Hudson, was based. Graduating from Harvard Business School, he had offers from Goldman Sachs and Salomon, but chose retail because he wanted work he might love for a lifetime.
He started at Mervyn's, a Dayton Hudson subsidiary on the West Coast, unloading trucks; he said he could empty a big trailer in about 40 minutes on a good day. By about age 30, around 1990, he was at Target, at the height of the discount wars.
The discount wars came down to two companies
He said the US then had 10 to 12 regional discount chains, but it was clear the fight would be between Walmart, the low-cost rural operator moving into the suburbs, and Target, the higher-priced suburban alternative. At Target he brought in a design partnership with architect Michael Graves, which he said changed the company.
"For your investors out there, Target would have been a good buy in 1990. It went up 12 times during the decade." — Ron Johnson
Target outperformed Walmart in that decade, he said, and Walmart has won the 25 years since.
