Above and beyond his shrewd business sense, James Cash Penney had an enduring desire for fairness in his business dealings. Raised by a Baptist minister, Penney had a greater interest in the spirit than in the letter of religion. As he once wrote, isn't serving people "part and parcel of business? It seems to me so. Business is therefore as much religious as it is secular." As an example of this philosophy, Penney initially called his stores the Golden Rule Stores, and made that rule part of company culture. But he was also pragmatic enough to open his store for half days on Sundays.
Although he made them work on Sundays, Penney treated his employees well and they were a large part of his success. The company's rapid expansion was fueled, in part, by encouraging store managers who had saved enough money to open a new store as part owner, with Penney providing two thirds of the start-up capital. He was also one of the first entrepreneurs to use corporate profit sharing to encourage employees to have a stake in the company's success.
Penney was born in 1875 on a farm near Hamilton, Missouri. With 12 children -- only half of whom survived to adulthood -- the family was often cash-strapped. At the age of eight, Penney's father told him he would be responsible for clothing himself, and soon he was earning more than enough for his sartorial needs selling junk, growing watermelons and raising pigs.
After graduating from high school, Penney worked as a sales clerk in Hamilton's general store. He had a strong work ethic and a knack for merchandising, and within two years of taking the job, his salary rocketed from $25 a year to $300. In 1897, Penney was diagnosed with tuberculosis, which forced him to uproot in search of a drier climate -- and a new business venture.
His first taste as part owner of a store came in 1902 in Kemmerer, Wyoming, a mining town of 1,000 people. It already had a company store, but Penney came in with a cash-only policy, despite a warning from a local bank employee that three previous businesses had failed to compete against the credit offered by the mining company. The first year, Penney saw almost $29,000 in sales and a hefty profit, and five years later, he bought out his partners, opened two new stores elsewhere in Wyoming. He was off and running.
Penney set up headquarters for the growing chain in Salt Lake City, Utah, and later in New York City to be closer to his major suppliers. Between 1920 and 1930, 1,250 new Penneys popped up in small towns across the country and the company went public in 1927. The company continued to grow by incentivizing store managers, and later employees, with stock.
But while his company was thriving, Penney had made some side investments in Florida real estate that eventually went sour, and he almost lost his entire holdings of $40 million. This served as a wake-up call, and Penney consequently turned his attention away from side projects and back to running the company down to the microscopic details.
As the mall became a cultural phenomenon in the 1950s, the company was well positioned to cater to the needs of middle-income suburban America. As late as the 1960s, Penney would still make the rounds of his stores, even stepping behind the counter to assist customers. He continued to serve the company on the board of directors until his death in 1971 at age 95. Today, the store still has 1,109 locations throughout the United States and a market capitalization of almost $8 billion.
Ultimately, Penney was characterized by the faith he put in his own hard work and in the potential in his employees. "Give me a stock clerk with a goal and I'll give you a man who will make history," he once said. "Give me a man with no goals and I'll give you a stock clerk."