Mike Ullman named CEO of JC Penney after Ron Johnson ousted
A customer leaves a JCPenney store.
Mike Ullman has been named CEO of JC Penney after Ron Johnson was ousted following a failed restructuring attempt.
"They've lost 30 percent of their business. It's just gone away," said Ed Fox, a marketing professor at Southern Methodist University who tracks JC Penney. "That's an incredible hurdle for a retailer to try to clear."
JC Penney shares rose 23 cents to $16.10 in after-hours trading. CNBC originally reported the firing Monday afternoon. Just last week, the board of the struggling retailer cut Johnson’s pay by more than 96 percent.
"Johnson was a commuting CEO from California, wasn't at Penney's corporate headquarters in Texas. Retails, details — to understand the rhythm of details with consumers, it's a six-and-a-half day business," says Burt Flickinger, a retail analyst at the Strategic Resource Group. "You can't do it from two states and that was the reason for the failure at Penney, which is quite concerning even with a new CEO on an interim basis."
JC Penney hired Johnson away from Apple in 2011 to turn the business around — a rocky transition that saw the retailer getting rid of two things it was known for, sales and coupons.
"Transformations are unpredictable and can be bumpy, and this one has been," Johnson said in a conference call earlier this year after a tough quarter that saw sales down 28 percent — more than half a billion dollars.
Besides getting rid of sales in favor of everyday low prices, Johnson made a number of drastic changes to the retailer — including bringing in hipper designer brands such as Betsy Johnson and remaking outdated stores — that confused consumers.
"They've brought in these hip cool brands, which at the end of the day, the consumer who has been shopping JC Penney is not really going to identify with," said Gabriella Santaniello, a retail analyst at Wedbush Securities.
To turn things around, Flickinger said JC Penney should consider calling Robert Mettler, who helped turn Sears around in the '90s and get a better board, which is full of retirees with low to no experience in retail.
The Associated Press contributed to this report.