J.C. Penney Co. ousted Chief Executive Officer Ron Johnson late Monday and reinstated his predecessor, Myron E. Ullman III, as the department-store chain works to rebound from declining sales.
The changes are effective immediately, the Plano, Texas-based company said.
The departure comes after a dismal first year on the job for Johnson, who arrived at J.C. Penney with great fanfare after building Apple Inc.’s network of stores. Johnson has been trying to transform most of the company’s stores into collections of boutiques and removing sales and coupons in a shift to everyday low prices.
The strategy failed to catch on, with sales in the year ending Feb. 2 plunging 25 percent to $13 billion, the lowest since at least 1987. Ullman served as J.C. Penney’s chairman and CEO for about seven years before Johnson took over.
J.C. Penney shares had dropped 50 percent from Nov. 1, 2011, the day Johnson started, through the close of regular trading Monday.
The most recent change Johnson had instituted involved more attention to Penney’s home department as part of a bigger plan to transform its stores into mini-malls of sorts.
The chain said it was revamping home areas within its stores to feature 20 boutiques and highlight 50 new brands.
Shoppers are to find an eclectic mix of items, from $60 Michael Graves’ stainless steel teakettles to $1,850 Jonathan Adler “Happy Chic” sofas.
The home areas, which Penney said would roll out first at 500 of the company’s 1,100 stores, were considered big tests of Johnson’s plan to open separate shops-within-stores for popular designers. The format, which gives department stores more of a mini-mall feel, have been popular at higher-end rivals such as Macy’s and Bloomingdale’s for years.
Penney lost a quarter of its revenue and amassed nearly $1 billion in losses in the past year.
Penney’s home business once accounted for nearly 20 percent of total store sales, but that number has dropped to 12 percent.