JC Penney CEO Ron Johnson Out

Ron Johnson, chief executive officer of J.C. Penny walks to State Supreme court in New York, U.S., on Friday, March 1, 2013. Photographer: Jin Lee/Bloomberg *** Local Caption *** Ron Johnson
Jin Lee/Bloomberg via Getty Images
Ron Johnson's disastrous tenure with J.C. Penney (JCP) has come to an end: The company has confirmed a CNBC report that Johnson is out as CEO of the floundering retailer. J.C Penney says in a press release that former CEO Myron E. Ullman III will be taking over as chief executive.

Johnson, who formerly headed Apple's wildly successful retail operations, was brought on by J.C. Penney in November 2011 in a bid to boost lagging sales, and he quickly made a number of radical changes to the century-old retailer.

The everpresent sales and coupons were scrapped in favor of a "fair and square pricing" scheme. He brought in fresh new apparel lines and used a "store-in-store" concept to turn the sales floor into a collection of branded boutiques. He armed salespeople with mobile checkout devices, another Apple Store innovation. And he touted the changes with major ad buys, including spots with celebrity spokeswoman Ellen DeGeneres.

But the changes were rejected by many J.C. Penney shoppers. The pricing scheme was abandoned after a year, with Johnson acknowledging that it was a "big mistake." We've heard from dozens of former J.C. Penney customers who said they no longer like the clothes they find at the store. And one sales associate told us that the mobile checkout devices frequently fail and make things less convenient for customers.

The company went from bad to worse as Johnson's grand experiment played out. Sales dropped a whopping 25 percent in his first year as CEO. Same-store sales were down 32 percent in the fourth quarter. As the share price dropped like a rock -- it's lost more than half its value in the last year -- big investors fled for the exits. And while Johnson's strategy had its defenders, the company was burning through a whole lot of cash making it a reality.

Calls for Johnson's ouster grew ever louder as quarter after quarter of dismal results rolled in, and at the beginning of the year we named him one of the CEOs most likely to lose their jobs in 2013. That prediction -- which we were by no means alone in making -- has now come true.

J.C. Penney stock is already up in after-hours trading on the news of Johnson's firing.

Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.

Increase your money and finance knowledge from home

Socially Responsible Investing

Invest in companies with a conscience.

View Course »

Investor’s Toolbox

Improve your investing savvy with the right financial toolset.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Moron.E.Ullman the Turd, should be fired for allowing the incorrect jcpenney logo to continue, J.C.Penney is the correct way to present the name, where were these old fossils educated?

May 15 2013 at 6:31 PM Report abuse rate up rate down Reply

Can't comment on the quality or style of the clothing, but I wish ALL retailers would follow the example of charging the rock bottom price before all the gimmicks, coupons, discount cards, rebates, etc. It is only a game that retailers play to get the consumer to the price they want for the item. There are no real sales anymore, except for clearance items, as prices are jacked up to create the "sale price". Unaware consumers are fooled into thinking they are getting "a deal". Life is too busy and too hectic to have to play this game and one now needs a degree in "consumerism" just to shop. I applaud JCPennys efforts to try and simplify shopping and not play with the heads of its customers . . . .but, it seems as if people enjoy the game. It's a joke.

April 09 2013 at 5:51 PM Report abuse -1 rate up rate down Reply

Heard they boycotted when they supported the homosexual agenda.

April 09 2013 at 5:27 PM Report abuse +1 rate up rate down Reply
1 reply to Rick's comment
hi sonshine girl

yeah !!!!

April 09 2013 at 6:08 PM Report abuse rate up rate down Reply

I want the old J.C Penny and the clothes they used to carry which were better. If they change back I will come back.

April 09 2013 at 5:17 PM Report abuse +5 rate up rate down Reply

Sounds like he should move to a government job. You're never fired for poor performance or driving the "business" into the ground.

April 09 2013 at 5:11 PM Report abuse +2 rate up rate down Reply

I used to love shopping at J.C. Penny and considered it my closet. But lately I too was dissatisfied about the frumpy style of clothes. Like people of a lower income do not deserve to look stylish....Come on, that not very nice..

April 09 2013 at 5:02 PM Report abuse +3 rate up rate down Reply

Since when does JC Penny have clothing that doesn't look cheap? Even the ambience looks cheap. I walked into the store once and just felt like I was in a Marshall's store or something equally crappy and walked out.

Why waste money on crappy cheap looking stuff?

April 09 2013 at 4:44 PM Report abuse -1 rate up rate down Reply

i bet he crying all the way to the bank after he got fired

April 09 2013 at 4:20 PM Report abuse +2 rate up rate down Reply

This sorry episode pretty much lays to rest the Business School model that once you know the "technique" of business, you don't really need to know what it is you're selling--or who your customers are.

April 09 2013 at 3:06 PM Report abuse +1 rate up rate down Reply

I"m with another ex-customer. Nothing in Penney's flyers or other ads could you find anything for the mature woman. They did away with Van Huesen shirts foir men - the mainstay of my husband's wardrobe. What happened to the Cabin Craft pants for women? I gave up on Penneys when I couldn't find a check-out station at the Plano, TX store. I'll wait and see if the new CEO restores
some of the old Penney's brands before I return.

April 09 2013 at 3:04 PM Report abuse +3 rate up rate down Reply