JCPenney fires Johnson, rehires Ullman

PLANO, Texas–JCPenney’s board of directors has let CEO Ron Johnson go and rehired former chief executive Myron “Mike” Ullman.

In a statement that said little about Johnson’s tenure as CEO and his controversial and ill-fated attempts to bring the retailer back to an everyday low price strategy, chairman Thomas Engibous praised Ullman.

“We are fortunate to have someone with Mike’s proven experience and leadership abilities to take the reins at the company at this important time,” Engibous said. “He is well-positioned to quickly analyze the situation JCPenney faces and take steps to improve the company’s performance.”

Added Ullman, “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. To that end, my plan is to immediately engage with the company’s customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the board to develop and clearly articulate a game plan to establish a foundation for future success.”

The market has been buzzing about the possibility of Johnson being fired for the last several weeks. Just hours before the announcement was made, Business Insider ran a story titled People Are ‘Taking Bets’ On When JCPenney’s Ron Johnson Will Get Canned.

In early February, the retailer refused to comment on rumors that it was on the verge of laying off more employees. JCPenney surprised the market when it was revealed in March that during his tenure, Johnson had laid off more than double the 19,000 full- and part-time workers reported in February. An SEC filing showed that in fact, the company laid off 43,000 of its 159,000 employees in 2012.

In late February, JCPenney reported a wider loss of $522 million in the fourth quarter. For the full year, the loss was $985 million compared to a loss of $152 million in 2011.

Johnson, a well regarded executive who spent 11 years in charge of retail at Apple and 15 years at Target before that, was hired to turn JCPenney around in November 2011. In January 2012, Johnson detailed his new strategy for the retailer. “Beginning February 1, we will have ‘Fair and Square Pricing,’ making every day a great day to shop,” he said. That was met with confusion from consumers. Many loyal customers, frustrated by a lack of coupons and apparently not understanding the new pricing, stopped shopping.

Ullman became JCPenney’s CEO in 2004. Prior to that, he served as group managing director of LVMH Moet Hennessy Louis Vuitton from 1999 to 2002. He was CEO of travel retailer DFS Group Limited from 1995 to 1999, and CEO of of R. H. Macy & Co., Inc. from 1992 to 1995.