@CNBC: BREAKING: Ron Johnson out as J.C. Penney CEO – source
Johnson, who had promised at the start of his stint to remake Penney into “America’s favorite department store”, is on his way out due to weak sales and a murky business strategy that included the replacement of the retailer’s traditional coupons and sales program with everyday low prices. That strategy apparently didn’t resonate with Penney’s price sensitive shoppers, prompting the company to book a $1 billion loss in FY 2012.
Penney has lost money in each quarter since Johnson’s hiring, and the stock has nosedived by more than 52 percent.
The struggling retailer’s board of directors announced on Monday that Johnson would be replaced by Myron E. (Mike) Ullman III, who had served as Penney’s CEO from 2004 to 2012 before Johnson came on board.
“On behalf of the Board of Directors, we would like to thank Ron Johnson for his contributions while at jcpenney and wish him the best in his future endeavors,” Thomas Engibous, chairman of the board of directors at JCPenney, said in a statement.
Ullman added, “While jcpenney has faced a difficult period, its legacy as a leader in American retailing is an asset that can be built upon and levera. To that end, my plan is to immediately engage with the Company’s customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the Board to develop and clearly articulate a game plan to establish a foundation for future success.”
JCP rose nearly 11 percent in after-hours trading, but then fell 7.4 percent to $14.70 after the company disclosed Ullman’s return.