J.C. Penney ousts CEO for previous leader
J.C. Penney Co. ousted Chief Executive Officer Ron Johnson and reinstated his predecessor, Myron E. Ullman III, as the department store chain works to rebound from its worst sales year in more than two decades.
The changes are effective immediately, the Plano, Texas-based company said on Monday in a statement. Ullman and J.C. Penney have yet to enter into an employment agreement, the company said in a separate filing.
The departure occurs at the end of a dismal first year on the job for Johnson, who arrived at J.C. Penney with great fanfare related to helping establish Apple Inc.'s network of stores. Johnson has been trying to transform most of J.C. Penney's locations into collections of boutiques and removing sales and coupons in favor of everyday low prices.
“He tried to change way too many things at the same time, ranging from management to the pricing structure to the shop-in-shop concept,” Howard Gross, managing director of the retail and fashion practice at executive search firm Boyden in New York, said. “All those things, even if done individually, would have been significant, but to hoist all those changes on the organization in one fell swoop was way too many changes at the same time.”
Sales in the year ended Feb. 2 plunged 25 percent to $13 billion, the lowest since at least 1987. Ullman, 66, served as J.C. Penney's chairman and CEO for about seven years before Johnson, 54, took over.
Shares dropped 50 percent from Nov. 1, 2011, the day Johnson started, through the close of trading on Monday.
J.C. Penney's shop-in-shops, installed in fewer than 700 of its 1,100 stores, are part of an effort to turn the company into what Johnson has called a “specialty department store.” Johnson had said his transformation of the company, presented to investors in January 2012, would take four years.
Last year, he said the shops, including boutiques for Levi Strauss & Co. and Izod, were producing higher sales per square foot.