Departmental store operator JCPenny Co., Inc. (NYSE:JCP) said Ron Johnson would succeed Myron Ullman, III as its Chief Executive Officer, effective Nov.1.
Johnson, who brings to JCPenney over 25 years of retail experience, has served for the past 11 years as senior vice president of retail at Apple Inc. (NASDAQ:AAPL), where he led its retail strategy. Apple retail, from its start in 2001 now has over 300 stores in the U.S. and abroad. Johnson joined Apple after 15 years at Target Corp. (NYSE:TGT), where he was a key merchandising executive.
Johnson's experience at Apple would help improve store experience at JCPenny, which has more than 1,100 department stores in 49 states and Puerto Rico.
Johnson, who will also join JCPenny's Board, effective Aug. 1, 2011, has also a long and successful track record of delivering year-over-year growth for multi-billion dollar companies.
He (Johnson) is widely recognized and highly regarded in the retail industry for his creativity and innovation, his commitment to empowering employees to deliver an unparalleled customer experience, and to making stores exciting places where people love to shop. His tremendous accomplishments at Apple and Target speak to his great consumer merchandising, marketing and operational talent, Ullman said in a statement.
The move behind appointing Johnson as CEO could have been driven by William Ackman of Pershing Square Capital Management and Steven Roth of Vornado Realty Trust, who together own more than 20 percent of the JCPenny stock.
As part of his new role, Johnson would invest $50 million in the company by acquiring 7 1/2-year warrants on 7.257 million shares of JCPenney stock. The warrants cannot be sold or hedged for the first six years of their term and have a strike price of $29.92.
It means, it would be a huge benefit for Johnson, if he can boost the stock value of the company. Johnson will also get a salary of $1.5 million and a shot at an annual bonus.
Investors seemed to have welcomed the move as shares of the JCPenny soared 17 percent to close Tuesday's regular trading session at $35.37. However, the shares were down in the pre-market hours Wednesday by 2 percent to $34.60.