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Sources Say J.C. Penney Is Looking For A New CEO... Again

After a rough four months with Mike Ullman at the helm, one of Penney's largest shareholders says, "we can't afford to wait."

Beleaguered department store J.C. Penney is once again seeking a new CEO, according to CNBC sources. The news comes just four months after the retailer ousted former Apple exec Ron Johnson after seeing $4 billion in revenue loss and a plummeting stock price. Johnson said treating J.C. Penney like a startup was one of his five biggest mistakes in the venture, which lasted less than a year and a half.

To replace Johnson, J.C. Penney brought in Mike Ullman, the retailer's former CEO. But Ullman's four months at the helm have been wrought with struggles, including a controversial Hitler-esque tea kettle and a horribly failed attempt at boosting company morale. To get customers back, J.C. Penney even tried good old-fashioned groveling with an apologetic ad. Despite it all, the stock continues to fall.

According to CNBC, Bill Ackman, a hedge fund manager, and one of the company's biggest investors, penned a letter to Penney's board expressing the need for a new CEO:

Considering the scale of J.C. Penney, the seriousness of the issues it faces, and the complexity of its business, there are only a handful of executives with sufficient talent and experience to take on the CEO role. We need a CEO with extensive, ideally department-store retail experience, strong operational skills, and a strong public company track record. When non-competes, geographical considerations, and other personal and timing issues are considered, the number of potential CEO candidates is quite limited. ... I strongly urge that we immediately put together a short list of candidates, determine their interest level, and schedule a fast-track

The letter also suggests Allen Questrom, who served as J.C. Penney’s CEO from 2000 to 2004, would take over while the hunt for a permanent replacement ensues. In response to the news, Penney's stock jumped 7%.

[Image: Flickr user Sam Howzit]

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  • DwDunphy

    The fault lies not in J.C. Penney's CEO but in themselves. JCP is traditionally a shopping mall store, and all shopping malls are chewing dust because of online shopping. They can keep on the CEO musical chairs all they want, but scapegoating isn't going to solve the crucial main problem. If the adage is still "location, location, location," then the shopping mall is the worst location if you want to revive a brand.

  • Anthony Reardon

    Right, but... a good CEO would take advantage of location. It's the shopping mall culture shift that has been occurring since the 80's. Used to be a lot of excitement about the shopping experience at a mall. That can be updated in conjunction with online experience.

    For one, you have this golden opportunity to get face-to-face time with a customer that walks in your door. Imagine getting greeted by a concierge personal service that registers you to an account, learns what you like and don't like, what kind of customer you are, size/style goals for your family members, and designs a custom online experience for you by the time you leave. It can be made easier than online, real-time tactile, and more convenient with regards to your time- being presented what you are looking for, within your budget, and quickly arriving at choices to try on for instance. You coach them into web shopping services, maybe they schedule an in-person event, or they come in and get greeted by name with a sales associate that has them on their tablet. You aim to become their retail partner of choice, offer scaling discounts on the basis of ongoing loyalty year to year, and make people feel like a million bucks every time they go to you in person or online.

    Best, Anthony

  • Anthony Reardon

    Wow! What an ordeal!

    Looking into this, the former CEO Johnson was right, but his execution was WAY off. I think it might be a case of going through the motions without really understanding the why and how. You put a traditional department store executive in the role, JCP is going to continue to go downhill anyway.

    So 4 billion in revenue lost, and this is blamed on Johnson's fair pricing model in place of discounts. It is true that JCP's established customer base was conditioned to respond to their sales models, and Johnson's retort that it wasn't a strategic error but that customers needed to be educated was also correct. I honestly don't think anyone picked up on what he was trying to do with the new model, so without the qeue's of sales the resulting outcome was pretty predictable.

    This brings me back to what I always say is the new competitive priority in modern business, and that's developing "superior market intimacy"- that means having a very close relationship for benefits such as being on the same page and influencing behavior. You don't do this by just presenting an ad and changing a price.

    Anyways, I agree that in terms of pricing, the way to move forward is to put your best foot forward at all times, and to develop a reputation for those competitive prices. It has to be deeper, more transparent, and more engaging though. Look at the mark up of clothing for instance which is huge compared to the cost of production. You've got to show people why you can offer superior pricing, make sure they understand the value, and make sure the product moves. You can compromise margin for volume and end up making more money in the process- especially once everyone realizes your brand is where to go to get the best deals.

    JC Penney is a business 101 model. There are so many things that could and should be done to innovate it, but even with the right ideas, you still need to understand the why and how.

    Best, Anthony

  • vonskippy

    Lets see, the last three "A listers" were dismal failures - so the "investor"says, lets have more of the same, only bigger, and hurry up.

    If the board follows this fops advice, they deserve to drive the company into the dirt.

    When the "same old same old" fails, and fails, and fails again, it's time for a younger, newer, original leader that will be willing to to try new things instead of going down with the ship, er company.