Penney CEO says company needs time to climb out of ‘abyss’

PLANO, Texas, Fri May 17, — J.C. Penney Co. Inc. CEO Myron Ullman told Wall Street on Thursday that the department store chain is emerging from what he called an abyss but warned he needs time to fix the issues of the retailer.
Penney reported another steep quarterly loss on weak sales and heavy clearance deals, but Ullman said the company has taken steps in recent weeks to reassure vendors, shore up its finances, and win back shoppers that defected after a move last year away from coupons.
“This won’t happen overnight,” Ullman said on a conference call with analysts, of Penney’s efforts to recover lost revenue. “Rest assured, we recognize the magnitude of the challenges that we face.”
Under Ullman, who returned as CEO last month to replace his successor Ron Johnson, Penney has secured a new $1.75 billion loan and brought back brands such as St. John’s Bay.
That brand alone brought in $1 billion in sales a year before Johnson dropped it for more fashionable lines.
The department store chain suffered a net loss of $348 million for the quarter ended May 4, or $1.58 per share, more than twice the $163 million, or 75 cents per share it lost last year. Gross profit margin fell 6.8 percentage points to 30.8 percent of sales as it slashed prices to move inventory.
Total sales fell 16.4 percent to $2.67 billion, in line with the company’s warning last week.
Despite the wider loss, shares slipped only 2 percent to $18.42 as analysts dismissed it as a remnant of the Johnson era.
The shares have climbed nearly 40 percent since Ullman returned to the chain, which is showing signs of getting back on track. Ullman was CEO from 2004 to 2011.
“Trends are improving — this is still a year of change. But things are stabilizing and traffic is improving,” said Marie Driscoll, an independent retail analyst, referring to the volume of visits by shoppers.
In addition to a new pricing strategy, Johnson’s vision was to roll out dozens of boutiques within Penney’s larger stores over the course of four years to showcase hipper, but affordable brands and offer exclusive merchandise.

J.C. Penney board comes under fire for CEO switch

PLANO, Texas, Tue Apr 9, 2013 — The board of J.C. Penney Co. Inc. is facing scathing criticism from retail investors and corporate governance experts after ousting Chief Executive Ron Johnson and replacing him with his own embattled predecessor, Myron Ullman.

Hours after the switch was announced on Monday, there was at least one call for the entire board to resign, while others suggested shareholders might vote out current board members at the company’s next annual meeting.

“It was the wrong thing for the board to do to get rid of Johnson here. With the board firing Johnson now, at this stage in the game, they should tender their own resignation as well,” said Brian McGough, managing director and head of the retail group at Hedgeye Risk Management.

Though the board may not face serious legal challenges to the decision, shareholders may question whether its move to replace Johnson with Ullman, who Johnson himself replaced in late 2011, is good for them.

J.C. Penney shares lost half their value during Johnson’s tenure after having shed 15 percent during Ullman’s time as CEO from 2004 to 2011. The stock price plunged further Monday night on the news of Ullman’s return, as analysts blamed him for creating the problems that Johnson was supposed to fix.