Activist investor Bill Ackman had more to say today about former J.C. Penney Company, Inc. (NYSE:JCP) CEO Ron Johnson’s departure. Last week he started to change his tune and speak less supportively and more negatively of Johnson, the man he handpicked to run the struggling retailer. By Monday, Johnson was out, and then on Tuesday, former J.C. Penney Company, Inc. (NYSE:JCP) CEO Myron Ullman was back in.
Today on Bloomberg, Ackman blasted Johnson’s lack of presence at the retailer’s headquarters in Texas. Many of the other executives he recruited also commuted to Texas from California or New York. He said Johnson’s decision to work from his California home was a problem because whenever a CEO isn’t visible to employees, company morale is lowered. According to Ackman, the new CEO’s physical presence will be an important part of the company’s turnaround.
The hedge fund manager did say Johnson did have the right vision for J.C. Penney, but he said choosing someone who had “always succeeded” in the past can be a problem. Also he said it can be difficult to find an executive who not only has a vision but who can execute it as well.
Ackman also said J.C. Penney would revive the coupon strategy Johnson did away with during his tenure. After Johnson got rid of virtually of the retailer’s promotions and discounts and replaced them with everyday low prices, sales dropped 25 percent.
In addition, he said the company’s management now needs to calm the vendors. UBS AG analyst Michael Binetti said it has delayed making payments to some suppliers.
As of the moment of this writing, shares of J.C. Penney Company, Inc. (NYSE:JCP) were up more than 5 percent.