Ron Johnson has resigned as ceo of JCPenney Co. Inc. (Plano, Texas), ending 17 months of promising innovation and several weeks of likely speculation.
He will be replaced by Myron (Mike) Ullman III, the former Penney’s ceo who was replaced by Johnson in June 2011 after seven years at the helm.
When Johnson was hired, he was coming off significant success as senior vp of retail operations at Apple Inc. (Cupertino, Calif.), and the company clearly hoped he’d bring some of that same magic to a venerable department store organization whose fortunes had slipped.
The hiring was followed by a flurry of marketing and promotional activities, announcements of new pricing and sale policies, new brands, new merchandising and efforts to renovate the 1100-unit chain.
And, while early efforts seemed promising, sales and profits never improved and new policies were replaced by old policies. Most recently, Johnson and Penney have been involved in an embarrassing, highly publicized breach-of-contract lawsuit involving Macy’s Inc. (Cincinnati) and Martha Stewart Living Omnimedia (New York).
Earlier this year, talking to analysts, Johnson acknowledged that “big mistakes have been made.”
During his tenure, the company’s shares have fallen more than 50 percent. The company reported a $552 million loss for its most recent quarter. Last week, the board of directors slashed Johnson’s pay by 97 percent. Former ceo Allen Questrom and William Ackman, whose Pershing Square Capital Management hedge fund now holds nearly 18 percent of JCPenney shares, have questioned the direction of the company. Ackman said the turnaround effort had been “very close to a disaster,” and urged Johnson’s dismissal.
Ullman, who said he’d been contacted by Penney’s chairman Thomas Engibous, JCPenney’s chairman about returning to the company (“my immediate answer was ‘absolutely,’ ” he said), said it was premature to discuss plans for Penney and which of Johnson’s efforts he would continue. “Some things are working well, others maybe not, but I deserve a chance to be on the ground,” he said. “Nobody ever wins by going back in retail because the customers’ expectations change all the time.”
Ullman, will be paid $1 million a year and receive a seat on the board.