News broke yesterday that Bill Ackman, who owns the largest share of JCPenney stock, voiced his unhappiness at the speed of the search to replace Mike Ullman as interim CEO. The rumor also escaped that former CEO Allen Questrom was willing to assume the chairman’s role (not the CEO job) if JCP hires the right chief executive. RetailWire panelists (like me) had a chance to weigh in on the latest JCP drama today:
Bill Ackman is starting to look like the Eddie Lampert of JCP. Yesterday’s pronouncement makes Mike Ullman a lame duck despite his best over the past four months to correct some of the Johnson-era promotional mistakes and to stop the cash bleeding. Why would anybody expect the lousy sales trend to turn on a dime, considering that Ullman inherited the bad inventory and shop concepts that Ron Johnson put in place? The home store in particular looks over-curated, overpriced and under-merchandised.
Nobody is likely to accept a CEO position at JCP as long as Ackman is looking over one shoulder and Allen Questrom (a great retailer) over the other, because he or she will have no real authority. This is the Sears saga all over again, and it’s worth noting the other high-profile executives (including Howard Schulz of Starbucks) who have stood up for Ullman.
If Ackman made good on his “threat” to dump his 18% ownership of JCP, the shares flooding the market would probably drive the stock price even lower over the short run, but it may be in the best interest of Penney’s ability to survive for the long run.