July 16, 2024

Apple Retail Executive to Lead J.C. Penney

The Apple executive, Ron Johnson, will replace Myron E. Ullman III as Penney’s chief executive on Nov. 1, the retailer announced. Mr. Ullman will then take a role as executive chairman.

“In the U.S., the department store has a chance to regain its status as the leader in style, the leader in excitement,” Mr. Johnson, 52, said in an interview. “I saw a very shared vision amongst the board to really take this great American brand and make it become something unbelievably exciting.”

He added, “It will be a period of true innovation for this company.”

Penney first contacted Mr. Johnson three or four years ago, Mr. Ullman said. That was about the time that the chief of merchandising and second-in-command at Penney, Ken C. Hicks, resigned; Mr. Hicks was not replaced. It is unclear whether Penney had contacted Mr. Johnson about Mr. Hicks’s position, about a board position, or about another job.

This time, the wooing of Mr. Johnson started with the two activist investors who joined Penney’s board in January. In November, the investor groups, Pershing Square Capital Management and Vornado Realty Trust, bought 26.4 percent of Penney stock. In January, William A. Ackman from Pershing and Steven Roth from Vornado joined the Penney board, and as part of that arrangement, got to appoint an additional director.

“It wasn’t until this year, when our two new investors had the right to appoint a third investor, that they reached out to Ron about getting him to take a board seat, with the hidden agenda of getting him to be my successor,” Mr. Ullman said.

“Bill Ackman and Steve Roth had the initial contact with the search firm,” he added, but “every single member of the board was involved in the recruitment.”

For his part, Mr. Ackman said, “Ron Johnson is the Steve Jobs of the retail industry.”

Mr. Johnson has gotten widespread credit for being the mastermind of Apple’s hugely successful retail strategy. He came to Apple in 2000, when the company was struggling to survive. When it opened its first store in Tyson’s Corner, Va., just over 10 years ago, Apple’s foray into retailing was received with heavy skepticism. But Apple defied critics.

Computers had previously been sold at drab big-box stores, but Apple came in with stores designed with glass and steel. It invited passers-by in to check their e-mail or play around on new gadgets, offered accessible technical support at stations dubbed “Genius Bars,” and held one-on-one training sessions and group workshops on how to use Apple’s products.

The stores, now numbering more than 300 worldwide, bring in a constant flow of both Apple loyalists and new customers attracted by the company’s ever-expanding array of hits, like the iPod, iPhone and iPad. “They turned retail upside down,” said Charles Wolf, an analyst with Needham Company. “Instead of filling shelves with items, they built this Zen-like environment. They created a unique experience and became a community for Mac owners.”

Analysts and investors cheered the hire, with shares rising more than 17 percent to close at $35.37.

“I really think this is a game changer,” said Deborah Weinswig, a retail analyst for Citi. “We’re at a very interesting kind of intersection right now where retail needs to be fun, it needs to be exciting, because the consumer doesn’t need to go to the store — they can do everything from their office or from their home.” What Apple has done “in terms of retail is absolutely unbelievable, so if he can take a little bit of that magic and sprinkle it on to J.C. Penney, you could really create the next generation of retailing,” she said.

Mr. Johnson did not specify what his plans were for Penney.

“I don’t have a priority list,” he said. “I have so many ideas in my head that I can’t quite sort them out, to tell you the truth.”

As for his experience at Apple, he said: “Apple has taught me, really, what breakthrough innovation is and how to energize teams to accomplish that. I’ve seen that happen on the product side at Apple; we’ve done that in our stores. I think that’s what I bring.”

Michael J. de la Merced and Miguel Helft contributed reporting.

Article source: http://feeds.nytimes.com/click.phdo?i=8c227cd825bfddce46aa614ac8e383ec

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