The transfer of Ron Johnson from computer giant Apple to American chain of department stores JCPenney has not been a success: his reign there lasted just sixteen months. His company said he did not realise any great achievements, but critics think JCPenney has decided to part ways too soon.
Mastermind behind Apple Stores
Johnson was vice-president of retail at Apple and together with his former boss Steve Jobs he designed the successful concept of the Apple Stores. It came as a big surprise when he announced his transfer to JCPenney in 2011, to become CEO.
Johnson had the mission to make JCPenney attractive again, in contrast to its image of a grey and boring chain. As new CEO Johnson however did not achieve any real successes. On the contrary: the decision to have more luxury brands on the shelves for example, lead to declining sales and rising loses.
The decision to stop doing big promotions and to replace them with permanent small price drops also was not well received. At the stock exchange the share of the chain of department stores lost half its value during the reign of Johnson.
Out with the new, in with the old
Johnson will be replaced by Myron Ullman, Johnson's predecessor as CEO of the company - the board of directors could not have made a more obvious statement. The decision is not met with universal approval: “It was the wrong thing for the board to do to get rid of Johnson. With the board firing Johnson now, at this stage in the game, they should tender their own resignation as well”, said Brian McGough of Hedgeye Risk Management.
Something that was starting to look like a success was the test to implement clothing chain Joe Fresh and interior decoration group Jonathan Adler in the JCPenney stores. Some observers thought this small success would help Johnson to make it to the fall, so he could present some more results on the project.
Investors do not seem to like the switch at the top of JCPenney: when the exit of Johnson was announced, the share rose, but when it became clear Ullman would return, the rise melted away and the share dropped below the last closing price of Johnson's reign. The Apple-man was brought to the company to fix the mistakes of Ullman and his return is really not a solution, say investors.