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Things are moving fast at J.C. Penney Co. Inc.
Ron Johnson, Apple Inc.’s senior vice president of retail, is set to become Penney’s chief executive officer in November, but today could be considered his first day on the job. He’s accompanying Penney’s current ceo and chairman, Myron E. “Mike” Ullman 3rd, to Hong Kong for the chain’s annual supplier summit this week, where key suppliers learn about the state of Penney’s business and long-range plans.
“Ron has not started his official duties yet. But since we are talking about how to move J.C. Penney’s business forward, it’s very important for our executives to be there,” said a company spokeswoman.
One retail analyst added: “Ron and Mike are already working together at J.C. Penney. While Johnson promised Apple that he would train his successor, he’s developing new loyalty at J.C. Penney.”
Penney’s said Monday that Ullman will stay with Penney’s until Feb. 1 and that, from November to February, Johnson will oversee the merchandising and marketing functions and Ullman will have responsibility for all other business areas. The Penney’s spokeswoman also said that Johnson will report to the board when he joins in November and to Ullman until February.
Monday’s statement clarified when Ullman would step down as chairman, which was not specified in Penney’s June 14 announcement on Johnson’s appointment. When asked about the timing, Ullman’s response was vague, telling WWD that he had a “long-term commitment to the board.”
Sources this week suggested that Ullman was vague because he wanted to stay past February, which would have likely been a mistake. “Thirty to 45 days is all you need for a transition,” said a former retail ceo who has orchestrated a few transitions. “For awhile, you want to be there to answer the questions the new person has. But after that, he wants to be seen as the boss and you’re seen as baggage. Things get strained,” and there’s confusion about who is in charge.
Retail analyst Walter Loeb questioned whether Ullman, former managing director of LVMH Moët Hennessy Louis Vuitton and chairman and ceo of DFS Group Ltd., really wanted to stay past February. “I think maybe Mike decided to not play second fiddle to Ron Johnson after training him for three months. Mike has a record of leaving quickly when he announces his retirement from a company.”
There was also some speculation that the two activists on Penney’s board, William Ackman of Pershing Square Capital Management and Steven Roth of Vornado Realty Trust, last week pressed for clarity on Ullman’s departure date and for when Johnson, who also becomes a member of the board in August, fully takes the reins.
But the Penney’s spokeswoman said Monday: “Nothing changed from last week’s announcement. All we did is provide further clarity on the succession timeline because it was creating confusion. The board has continued to be unanimous in its support of Ron as ceo and in the transition plan Ron and Mike developed, which include both division of responsibilities and timing for succession.”
“In all of this, Mike has been the least agitated,” said a retail source close to Penney’s. “He’s not clinging on. He’s the one saying ‘I don’t need to be here.’ February was always kind of in front of him. There is nothing tricky about this. Mike played a very big part in recruiting Ron. So did Bill Ackman.”
While confusion surrounding the ceo transition has been cleared up, Penney’s still has some unanswered management questions, like whether Johnson will become chairman in February as well as ceo. “That has not been determined yet,” said the Penney’s spokeswoman.
There’s also the question of a president. Penney’s hasn’t had one since the departure of Ken Hicks, who became ceo of Foot Locker Inc. more than three years ago. His responsibilities were dispersed to other senior managers.