NEW YORK — Myron E. (Mike) Ullman has rejoined Penney as CEO, effective immediately, replacing Ron Johnson, who is leaving the company. Ullman, who served as CEO of Penney until late 2011, has also been elected to the board of directors.
Johnson’s departure was not all that unexpected given the chain’s mounting losses and sales declines. But it was still a stunning reversal of fortune for the former golden boy of Apple, who left the tech giant amid great fanfare for the top job at Penney.
Johnson’s brief tenure at the department store chain was marked by what many industry analysts felt were strategic missteps, from his decision to jettison sales and coupons to his pact with Martha Stewart, which embroiled Penney in its ongoing legal mess with Macy’s. But more than anything, it was the chain’s declining fortunes that did him in.
Penney reported a net loss of $985 million for fiscal year 2012 — its first full year under Johnson — compared to a $152 million loss the year before. Annual revenue dropped 25% to $13 billion. The crucial fourth quarter was a disaster: The company’s net loss widened to $552 million from $87 million a year earlier and revenue fell 28.4% to $3.8 billion. Same-store sales plummeted 31.7% and Internet sales fell 34.4%.
In recent weeks, criticism of Johnson’s performance had reached not only a crescendo, but an apparent tipping point as investors and the Penney board started to lose faith. On Friday, William Ackman, whose Pershing Square Capital Management is the chain’s largest investor and the man who personally recruited Johnson to Penney, publicly criticized the chief executive. Speaking at an investor conference in Boston, Ackman said Penney’s has seen “too much change too quickly without adequate testing” and that Johnson’s reinvention of Penney had been “very close to a disaster.”
In early March, Vornado Realty Trust, formerly the retailer’s second-biggest shareholder, sold off nearly half its stake in the company.
When Johnson, the former SVP of retail at Apple, took the reins in November 2011, Penney was struggling with a dowdy, outdated image and declining sales. In January 2012, Johnson unveiled a bold and ambitious strategy to transform Penney from a traditional department store into