Ron Johnson is credited with J.C. Penney's (JCP) absolutely dismal performance of 2012, a year during which he removed the department store’s most beloved customer programs, such as coupons and sales, in an attempt to introduce an “everyday low price” scheme as part of the company’s turnaround strategy.
Instead, Johnson’s decision-making process cost the company dearly, alienating a healthy section of its long-time, traditional customer base, before doing anything to bring those shoppers back.
During his tenure, Johnson has overseen a 50 percent decline in the company’s share price, as well as a decrease of nearly that size in Penney’s market cap.
The company’s board of directors indicated that former CEO Myron Ullman would replace Johnson immediately.
After a day that saw J.C. Penney close up 2.72 percent at $15.87, shares popped in late trading around ten percent, before promptly erasing all the gains and then some, dropping 9.77 percent to $14.32.
The news comes at a time when the company is also getting dragged back to court by department store rival Macy’s (M), over what it says infringements of its exclusive deal to sell Martha Stewart Living Omnimedia (MSO) products.
Ullman, as Johnson’s replacement, will still have to contend with some of his legacy whether he wants to or not. Johnson greatly rearranged the J.C. Penney look by renting out much of the store’s space to different brand names for store-in-store boutiques, as well as having bought a nearly 17 percent stake in Martha Stewart’s company when that deal was being made.
If the deal with J.C. Penney does in fact become invalidated, the company will have to contend with the empty spaces in its stores that were to be designated areas for Stewart’s merchandise.