J.C. Penney Co. ousted Chief Executive Officer Ron Johnson on Monday and reinstated his predecessor, Myron E. Ullman III, as the department-store chain works to rebound from its worst sales year in more than two decades.
The changes are effective immediately, the Plano, Texas-based company said. Ullman and Penney's have yet to enter into an employment agreement, the company said in a separate filing.
The departure comes after a dismal first year on the job for Johnson, who arrived at Penney's with great fanfare after helping create Apple Inc.'s network of stores. Johnson has been trying to transform most of Penney's locations into collections of boutiques and removing sales and coupons in favor of everyday low prices.
“He tried to change way too many things at the same time, ranging from management to the pricing structure to the shop-in-shop concept,” Howard Gross, managing director of the retail and fashion practice at executive search firm Boyden in New York, said. “All those things, even if done individually, would have been significant, but to hoist all those changes on the organization in one fell swoop was way too many changes at the same time.”
Sales in the year ended Feb. 2 plunged 25 percent to $13 billion, the lowest since at least 1987. Ullman, 66, served as Penney's chairman and CEO for about seven years before Johnson, 54, took over.
Penney's fell in after-hours trading Monday. The shares had dropped 50 percent from Nov. 1, 2011, the day Johnson started, through the close of regular trading Monday.