The spokesperson of J.C. Penney Company, Inc. (NYSE:JCP) dismissed rumors that the company’s chief executive officer, Ron Johnson is planning to resign from his position after the company reported a weaker-than-expected financial performance for the fourth quarter of 2012.
In an e-mail statement to Bloomberg, Joey Thomas, spokesperson for J.C. Penney Company, Inc. (NYSE:JCP) said, “Ron Johnson is not quitting or resigning from J.C. Penney and he has no plans to do so. The rumours are false.”
Johnson received criticisms after the department store chain reported the lowest earnings since 1987, a year after implementing its turnaround strategy. During the fourth quarter J.C. Penney Company, Inc. (NYSE:JCP) posted a net loss of $552 million or $427 million excluding restructuring and management transition and other charges, and its revenue declined to 3.88 billion.
Allen Questrom, former CEO of J.C. Penney Company, Inc. (NYSE:JCP) commented that the company’s recovery will not happen under Jonson’s leadership. According to him, the longer the board of directors waits to remove him from his position, “the worse it’s going to get. Questrom retired from the department store chain in 2004.
Johnson admitted during the 4Q earnings report of the company, that he made some big mistakes particularly his decision to remove sales and coupons, which alienated J.C. Penney customers. He said, “We also made some big mistakes and I take personal responsibility for these.” According to him, the company will offer sales and coupons this year, and it will also introduce new products from leading designers and brands including Canadian retailer Joe Fresh.
Last week, Vornado Realty Trust (NYSE:VNO), the second largest shareholder of J.C. Penny sold almost 50 percent of its stockholding in the company. According to people familiar with issue, Vornado sold 10 million shares at $16.40 per share Deutsche Bank AG (NYSE:DB) (ETR:DBK); the stock value of J.C. Penney declined by 44 percent since June 2011.
Johnson served as retail chief of Apple Inc. (NASDAQ:AAPL) before joining the department store chain.
Bill Ackman of Pershing Square Capital Management is confident that the sales of J.C. Penney will stabilize during the Harbor Investment Conference. He also noted that Johnson accomplished many things over the past 14 months particularly in restructuring the company’s cost and renovating stores.
During a previous interview with CNBC, Ackman said Johnson has three years to revive J.C. Penney. If the company is still struggling after three years, he can say, “he’s probably the wrong guy.” Pershing Square Capital Management owns 17.8 percent stake in the company.