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Late yesterday afternoon, JCPenney announced that beleaguered CEO Ron Johnson was no longer with the company and that his predecessor, Mike Ullman, would be returning to the CEO post.
Johnson's controversial tactics since taking the reigns in 2011 include eliminating sales, rolling out a series of shop-in-shops, and flat-out ignoring e-commerce and mobile, two of the fastest growing sectors in retail.
To be fair, most of Johnson's changes were always positioned as a long-term strategy. When he revealed his vision for the retailer back in February 2012, Johnson acknowledged that he was inheriting a company that had "picked up some bad habits" along the way, and that the his overhaul was intended to rid itself of that stale connotation that was synonymous with shopping at Penney's.
The classic department-store model Penney's had been following is one of the oldest formulas in the retail game, and mixing it up was not only risky, but revolutionary. Johnson's departure comes just as his more exciting changes—the introduction of exciting, exclusive, fashion-focused collections from the likes of Joe Fresh, Lulu Guinness, Nanette Lepore, and other respected brands—are going into effect. It's too early to know yet whether they will resonate with Penney's customer, or even more importantly, successfully recruit a new type of shopper to the store. A year-and-a-half isn't much time to turn the Titanic around.
Graphic via WWD
But Penney's wasn't feeling patient. WWD reports that the company lost $985 million last year as sales fell 24.8% to $12.99 billion, and that shares of the company fell 50% to $15.87 (see: the scary-looking graph above). "I was not surprised, based on the results," said former Penney's CEO Allen Questrom. "I was disappointed they didn't [fire Johnson] earlier."
Ullman told WWD he was "contacted by Penney's chairman over the weekend, given a couple of days to discuss with his wife whether he wanted to return, and found himself back in the role on Monday. 'I have six kids and I sit on six boards,' he said. 'There were a lot of things we had to consider. My instinct was, I would love to take the job, but let me discuss it with my wife.'"
WWD spoke to a whole bunch of industry insiders who are confident that Ullman can fix the situation. "Leave it to Ullman," said Bud Konheim, CEO of Nicole Miller, who has a diffusion line with JCPenney. "He's good. He's taken over the situation before. He knows all the people and everybody loves him."
Or... here's another idea, courtesy of one Racked commenter, "What JCPenney needs to do is market itself as Americana, go indie and crafsty, and hire Steven Alan to be CEO and merge with Steven Alan." Now there's a Change.org campaign waiting to happen.
· J.C. Penney's Shocker: Mike Ullman Retaking Reins [WWD]
· JCPenney Delivers on Promise To Make 'Cute Shit' With Bijoux Bar [Racked]