J.C. Penney names Apple’s Ron Johnson as its new CEO
Department store giant J.C. Penney Co. has hired the head of Apple Inc.'s successful retail stores as its new chief executive.
Ron Johnson, 52, will replace current J.C. Penney CEO Myron E. Ullman III on Nov. 1, the company said Tuesday. Ullman, 64, has been CEO since 2004 and will become executive chairman.
The announcement sent J.C. Penney’s stock up $5.26, or 17.5%, to $35.37 and boosted the company’s market value by $1.1 billion, to $7.5 billion.
As senior vice president of retail at Apple for the last 11 years, Johnson led the tech company’s retail strategy, which included launching brick-and-mortar stores in 2001. Today Apple operates more than 300 locations, which are lauded for their extensive customer support and innovative store design and for bringing a cool factor to the gadget shopping experience.
“I’ve always dreamed of leading a major retail company as CEO,” Johnson said in a statement, “and I am thrilled to have the opportunity to help J.C. Penney reimagine what I believe to be the single greatest opportunity in American retailing today: the department store.”
Johnson joined Apple after 15 years at Target Corp., where he held positions including vice president of merchandising.
Bringing in an executive from a trend-setting company such as Apple is a smart move for J.C. Penney, which has a “pretty sleepy image historically” and was in need of a management shake-up, said Leah Hartman, senior vice president of research at CRT Capital Group.
“Apple is such an obviously well-capitalized, cutting-edge technology company, and I think the retail stores are phenomenal,” she said. “I certainly think he’ll bring a fresh mind.”
But she cautioned that Johnson will need to translate his success selling iPhones, iPads and computers at Apple stores “into selling T-shirts and blue jeans and ladies’ dresses.”
“That’s probably the biggest challenge when you get someone who comes from outside apparel retail,” she said.
J.C. Penney said Johnson would join its board of directors in August. The Plano, Texas, company operates more than 1,100 department stores in the U.S. and Puerto Rico and says it serves “more than half of America’s families” each year.
Like most retailers, J.C. Penney struggled during the economic downturn as consumers scaled back on discretionary spending. Its customers were more affected by the recession than shoppers at Macy’s and other chains.
This month, J.C. Penney reported that sales at stores open at least a year fell 1% in May, missing Wall Street estimates.
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