Ackman-Picked J.C. Penney CEO Out

Apr 9 2013 | 10:12am ET

Just days after his champion, Pershing Square Capital Management's William Ackman, called his stewardship of J.C. Penney "very close to a disaster," Ron Johnson is out as the retailer's CEO.

The company's board met yesterday and decided to let Johnson go.

Johnson, who took over Penney's just 17 months ago, was replaced by his predecessor, Myron Ullman—the very man Ackman successfully sought to replace at the end of 2011 with Johnson, whose hire was considered a coup at the time; Johnson was highly sought-after following a successful run as Apple's retail chief, overseeing the introduction of the company's hugely successful stores.

Penney's was a different matter, however. The end of Johnson's tenure comes after a series of missteps as the former Apple Inc. executive sought to remake the struggling retailer—notably a high-profile, and failed, effort to end discount sales, which succeeded only in driving away customers and further cutting into the company's sales.

"I wouldn't recommend that we go back to the way J.C. Penney was when I left" after a seven-year tenure, Ullman said. "Things change." But, "there's no reason to try and alienate customers who want to try and shop at J.C. Penney."

Penney's gave Johnson $50 million in shares to lure him.

Most analysts thought that Johnson had at least another quarter or two to turn things around, even after Ackman said Friday that criticism of Johnson "is deserved" and that "there have been some big mistakes."

"The impact has been, on a consolidated basis, very close to a disaster," both for Penney's and for Pershing Square: The hedge fund, Penney's largest shareholder, has lost about $500 million on paper on its stake.


In Depth

Exotic Assets: Investing In Rare Violins

Jan 17 2017 | 4:43pm ET

By definition, alternative investments include exotic assets far beyond your typical...

Lifestyle

'Tis the Season: Wall Street Holiday Parties Back In Fashion

Dec 22 2016 | 9:23pm ET

Spending on Wall Street holiday parties has largely returned to pre-2008 levels...

Guest Contributor

DarcMatter: The Top Trends in Alternative Investments for 2017

Jan 13 2017 | 8:22pm ET

The $7 trillion alternative investments industry is poised for continued growth...

 

From the current issue of

The healthcare sector went on a tear beginning in 2011, thanks in large part to the passage of the Affordable Care Act and its impending implementat