Penney CEO Out, Old Boss Back In
J.C. Penney Co. has made the decision to fire Ron Johnson, the chief executive they hired from Apple Inc. They are firing him due to the drastic fall in sales and revenue. Penney’s board met this past Monday and decided to replace Ron Johnson with the former CEO of J.C. Penney, Myron Ullman. Myron Ullman is now in a very tough position as few retailers have rebounded from declines as deep as 25% drop in sales. This is largely due to Ron Johnson’s strategy to reinvent the stores. Rather than improving profits, Johnson’s strategy alienated bargain shoppers as he stopped clearance sales.
J.C Penney Co. is not looking too good due to the major losses in revenue and turmoil when it comes to management. The biggest problem they currently face is how to regain customers without burning through all their cash. Last month, Steven Roth’s Vornado Realty trust, who was Penney’s second-largest shareholder, has dumped more that 40% of its stake.