Boston, MA 04/09/2013 (wallstreetpr) – A radical break was made by the J.C. Penney Company, Inc.(NYSE:JCP) (Current: $15.87, Up by 2.72%) with a tradition by hiring a Silicon Valley wunderkind Ron Johnson as its Chief executive officer. Since Johnson is gone, the chain should pursue even more such radical options, such as one of the option of selling itself. Since the company suffered an annual sales decline of about 25 percent. As a result J.C. Penney ousted yesterday Mr. Johnson who is 54 years old and replaced him with one of his predecessor, Myron E. Ullman who is about 66 years old. Investors who helped in pushing up the shares up to about 13 percent when came to learn that Johnson was fired, they all sold abruptly after even learning that Ullman became the new CEO. Due to this J.C.Penny Co. (NYSE:JCP) dropped off about 4.9 percent in the trading system of the Germany from the closing price of the day before. Several tough choices are being faced by Mr. Ullman. He is under pressure as he has to decide whether he should continue the strategy of Mr. Johnson of making the chain into the collection of the boutiques or come back to one of the most traditional model of the departmental store or not. In addition to this he also has to decide whether he should sell out the company or he should break it up. It was said by Mr. Dave Larcker who is a corporate governance professor at the Stanford Graduate School of Business in Stanford, California.
Larcker even said that “The board is going to have to get much more involved in the strategy of the company”. He even said that “Some people may even attack the board, as well, for how this happened. This was really a very high profile hire. For it to unravel this quickly is kind of terrifying.” One of the company which is also a Texas based chain known as the Plano was also damaged too much due to Johnson. So it is also a great challenge for the new CEO to how to make it right and again bring the company into the track. The company J.C.Penny Co. (NYSE:JCP)reported a drop in the annual revenue of about 13 billion dollars on the date of the Feb 27 which is the lowest since about 1987. He even alienated many a core companies who are the customers from a long way are doing away with the promotions and the sales and have recently began trying to win them back by putting some discount center and front again.
The managing director of the retail and the fashion practice at the executive search from the Boyden in New York, Howard Gross said in a telephone interview that “There is a tremendous amount of cleaning up and rebuilding that has to take place”. The appointment of Johnson’s as CEO in the month of November 2011 was greeted with too much anticipation by the investors and the analysts. This was done so as he helped Steve Jobs proving the doubters wrong by turning the stores of the Apple into a great success.
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