JC Penney sacks chief executive
Mike Ullman replaces Ron Johnson.
The British department store chain JC Penney has sacked its chief executive Ron Johnson as he failed to put the company back to growth and profitability.
Johnson, the Apple veteran who joined the company 17 months ago, is criticised for not testing his ideas before rolling them out across the retailer’s 1,100 stores.
The company appointed Mike Ullman as its new interim chief executive, effective immediately. Ullman, who was chief executive of the company from 2004 to 2011, would rejoin the board and receive an annual base salary of $1m.
Bill Ackman, the retailer’s biggest shareholder and a board member, played vital role in installing Johnson.
Investors hoped that Johnson would bring a touch of Apple’s success to JC Penney. For the year ended 2 February 2013, sales of JC Penney sales fell by 25 per cent to $13bn.
Ullman told the Financial Times: “Tomorrow morning the journey begins. His objectives were profitable growth, winning back the customers JC Penney had lost and attracting new shoppers.”
Ullman said that he had introduced Sephora and Mango shop-in-shops to the retailer’s stores, while blaming weak sales on sluggish mall traffic and the economic slowdown.
On Mr Ullman’s reappointment, Stacey Widlitz of SW Retail Advisors told FT: “I think everybody was hoping for somebody with fresh ideas that they could hang some hope on. But to bring back the old regime, you are getting more of the same.”
Vornado Realty Trust, which invested in JC Penney alongside Ackman, reduced its stake in half to about 6 per cent in March citing discontent over Johnson’s performance.
JC Penney shares grew by 10 per cent in after-hours trading when Johnson’s departure was reported, but they declined with the announcement of Ullman’s return.