JC Penney fired CEO Ron Johnson this afternoon and is bringing back its former CEO, and it’s unclear what will happen to the big plans to transform the store into 100 shop-in-shops.
It is also unclear how this will impact the vendors who committed to Johnson’s vision, including brands like Joe Fresh that invested a lot of resources to move into JC Penney.
Johnson significantly cut JC Penney’s workforce and hired many outside executives. He has been underfire for not testing his ideas before launching a wholesale remodel and for being completely out of touch with the core JC Penney shopper, who liked the coupons and discounting that he dismissed as obsolete.
The Levi’s shop-in-shopHis ideas were exciting and revolutionary but such a radical departure from the old JC Penney, they could not be implemented quickly enough, and he lost the company’s core customer before he was able to attract new ones.
Hedge fund manager William Ackman, a large shareholder, said Friday that Johnson had made some “big mistakes” and the impact on JC Penney was “very close to a disaster,” according to Reuters.
In the action sports industry, DC Shoes had committed to selling to JC Penney before Johnson’s arrival, and Vans sold there long before that, so both may not be impacted by the news.
But Levi’s had a lot invested in the shop in shops, as did many other brands from outside the industry that were committed to the new plan.
Some other industry brands that need to show growth and need more distribution in the U.S. that can move the needle were closely watching to see if Johnson could pull off the transformation.
Here’s the press release announcing the news:
JCPENNEY APPOINTS MYRON E. (MIKE) ULLMAN, III CHIEF EXECUTIVE OFFICER, SUCCEEDING RON JOHNSON
Plano, Texas, April 8, 2013 – The Board of Directors of J.C. Penney Company, Inc. [NYSE: JCP], today announced that Myron E. (Mike) Ullman, III has rejoined the Company as Chief Executive Officer, effective immediately. He has also been elected to the Board of Directors. Mr. Ullman is a highly accomplished retail industry executive, who served as CEO of jcpenney until late 2011. He succeeds Ron Johnson, who is stepping down and leaving the Company.
Thomas Engibous, Chairman of the Company’s Board of Directors, said, “We are fortunate to have someone with Mike’s proven experience and leadership abilities to take the reins at the Company at this important time. He is well-positioned to quickly analyze the situation jcpenney faces and take steps to improve the Company’s performance.”
Mr. 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 leveraged. 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.”
Mr. Engibous added, “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.”
About Myron E. (Mike) Ullman, III
Mike Ullman is a veteran retail industry executive with more than 25 years of experience who has served in leadership roles at several of the world’s best-known retail companies. Prior to spending seven years leading jcpenney, as Chairman and CEO through November 2011 and Executive Chairman through January 2012, he served as Directeur General of the world’s largest luxury group, LVMH Moët Hennessy Louis Vuitton, in Paris; Chairman and Chief Executive Officer of DFS Group Limited, the world’s leading travel retailer; and Chairman and Chief Executive Officer of R.H. Macy & Co., Inc. Mr. Ullman’s prior retail experience also includes leading Wharf Holdings Ltd. in Hong Kong and posts at Federated Department Stores earlier in his career. In addition, he previously served as a White House Fellow in the Reagan Administration, Vice President of Business Affairs at the University of Cincinnati, and as an International Account Manager for IBM Corporation.
Mr. Ullman currently serves on the boards of directors of Starbucks Corporation (NASDAQ: SBUX), Saks Incorporated (NYSE: SKS), and the COFRA Group headquartered in Zug, Switzerland, and as Deputy Chairman of the Federal Reserve Bank of Dallas. He is an advisor to the board of directors of the Retail Industry Leaders Association and is a past Chairman of the National Retail Federation. He is also Chairman of the Board of Mercy Ships International, a global medical and human services charity. He previously served as a director of Ralph Lauren Corporation; Taubman Centers, Inc.; LVMH Moët Hennessy Louis Vuitton; Federated Department Stores; and Segway, LLC.
