Activist shareholder William A. Ackman reportedly is pushing his fellow JC Penney board members to find a new CEO to replace current CEO Myron Ullman, a suggestion that the rest of the board apparently is pushing back on, believing that Ullman has stabilized a badly listing organization.
JC Penney has, of course, had more than its share of leadership issues. Ullman was the CEO when he was replaced by Ron Johnson, formerly of the Apple Stores, who was brought in to reinvent the department store chain and move it away from its discounts-and-promotions approach to marketing; Johnson, as it happens, was championed by Ackman. When that didn't work out - sales, traffic and profits plummeted - Johnson was fired and Ullman was rehired.
But Ackman reportedly remains dissatisfied, and he released a letter to the media in which he said that a new leader should be found within a matter of months, but that a search committee and headhunter firm hired by the board "have barely begun their work."
"We need a CEO with extensive, ideally department-store retail experience, strong operational skills, and a strong public company track record," he wrote. "When non-competes, geographical considerations, and other personal and timing issues are considered, the number of potential CEO candidates is quite limited."
The response from the board reads, in part: “The board of directors strongly disagrees with Mr. Ackman and is extremely disappointed that his letter was released to the media at the same time that it was sent to the board. Mr. Ackman has been integrally involved in the Board’s activities since he joined two years ago. This includes leading a campaign to appoint the company’s previous C.E.O., under whose leadership performance deteriorated precipitously. His latest actions are disruptive and counterproductive at an important stage in the company’s recovery.”
JC Penney has, of course, had more than its share of leadership issues. Ullman was the CEO when he was replaced by Ron Johnson, formerly of the Apple Stores, who was brought in to reinvent the department store chain and move it away from its discounts-and-promotions approach to marketing; Johnson, as it happens, was championed by Ackman. When that didn't work out - sales, traffic and profits plummeted - Johnson was fired and Ullman was rehired.
But Ackman reportedly remains dissatisfied, and he released a letter to the media in which he said that a new leader should be found within a matter of months, but that a search committee and headhunter firm hired by the board "have barely begun their work."
"We need a CEO with extensive, ideally department-store retail experience, strong operational skills, and a strong public company track record," he wrote. "When non-competes, geographical considerations, and other personal and timing issues are considered, the number of potential CEO candidates is quite limited."
The response from the board reads, in part: “The board of directors strongly disagrees with Mr. Ackman and is extremely disappointed that his letter was released to the media at the same time that it was sent to the board. Mr. Ackman has been integrally involved in the Board’s activities since he joined two years ago. This includes leading a campaign to appoint the company’s previous C.E.O., under whose leadership performance deteriorated precipitously. His latest actions are disruptive and counterproductive at an important stage in the company’s recovery.”
- KC's View:
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There's no question that JC Penney and its surrogates are looking around for a new CEO to lead the company, which continues to have enormous problems - tons of square footage of brick-and-mortar sales floor, a dispirited employee base, and no real vision of where the company needs to go.
The problem, as I see it, is that they need to find someone of real accomplishment and specific vision ... but I'm not sure who would want to take the job. You'd have to be nuts to think you could turn around this beached and bloated enterprise with any sort of speed, and the clock is working against you as other retailers - physical and virtual - continue to improve their offerings.
And by the way, I love it that Ron Johnson now is all Ackman's fault. Like the rest of the board members didn't get a vote...? This doesn't strike me as a board with any sort of backbone, and is certainly not to be trusted.
