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Ron Johnson fired as CEO of JCPenney; Ullman to return

updated 06:42 pm EDT, Mon April 8, 2013

Former Apple retail chief's job just happens to be open

Former Apple retail boss Ron Johnson is leaving department store chain JCPenney, fired after his plan to remake the venerable business in an effort to update to 21st century buying habits failed to win over customers. Johnson, who put the brakes on endless sales in favor of everyday low prices and remodelled stores to have "store within a store" concepts for major brands, will be succeeded by his predecessor, Mike Ullman. Johnson left Apple in late 2011 to revitalize the chain, but the 111-year-old company has posted losses for the last six quarters.

Overall, JCPenney's revenues in 2012 were down 27 percent from 2011, equalling a loss of nearly $13 billion from the year before, CNBC reports. Though the chain had received some public support following attacks on it by anti-gay organizations (both for its selection of Ellen Degeneres as spokesperson and for airing two commercials that featured same-sex couples), the older and conservative demographics that tend most heavily to patronize department stores did not take to the changes Johnson made, and the company failed to change its image sufficiently to attract younger shoppers, even with an emphasis on trendy items.

Johnson's failure at JCPenney is noteworthy following his enormous success at Apple, though the average demographic for the electronics giant is perhaps younger and more trend-conscious. Johnson presided over the building and execution of Apple's retail store strategy, in coordination with input from other Apple executives such as Steve Jobs, and turned the franchise into the most profitable retail chain in history in under 10 years. His record of focusing on strong customer experiences in an elegant-but-friendly retail environment earned Johnson respect from both customers and retail employees.

His replacement, John Browett, ironically took the opposite tack to Johnson -- devaluing the employee element and customer support in favor of policies designed expressly to improve profitability (when the chain was already far ahead of other retailers in profits-per-square-foot). The measures were unpopular with both customers and employees, and Browett left Apple in November and returned to a CEO position at a clothing and accessory chain in his native England. Browett later told reporters his firing was a matter of his not "fitting in" with the company's vision rather than an issue of competency.

Interestingly, this leaves Johnson's former position at Apple open at present. Tim Cook and other executives, including right-hand man Phil Schiller, have been handling retail responsibilities in a temporary capacity until a replacement is found.

JCPenney's board chairman, Thomas Engibous, confirmed Johnson's departure, saying that the company was fortunate to have Ullman's "proven experience and leadership abilities to take the reins of the company," during the transition. Ullman is "well-positioned to quickly analyze the situation JCPenney faces and take steps to improve the company's performance." JCPenney stock rose on initial news of Johnson's departure but has since retreated again. The company's stock dropped to half its former level during Johnson's tenure.

Ullman, in his first statement as the returning CEO, said that 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."




by MacNN Staff

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Comments

  1. seanpatterson

    Fresh-Faced Recruit

    Joined: 11-04-11

    Sounds like...

    a good time for Johnson to return to Apple!

  1. gramos

    Fresh-Faced Recruit

    Joined: 03-26-08

    JCP needs to...

    ...wake up to the realization that their base customers are baby boomers; these folks are retiring/dying off; all they have left are some Gen X'ers. They are headed the way of the Do-Do (like Sears) and it is only a matter of time before the company bleeds-out. Sad, but I believe this to be true.

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