Apple’s Ron Johnson to become CEO of J.C. Penney
New York City -- Ron Johnson, the man credited with building Apple’s wildly successful retail empire, is leaving the high-tech company to become CEO of J.C. Penney Co.
Johnson will take the reigns at J.C. Penney on Nov. 1. He will report to current CEO Myron (Mike) Ullman, III, who will become executive chairman. Johnson will join the company's board, effective Aug. 1.
“I've always dreamed of leading a major retail company as CEO, and I am thrilled to have the opportunity to help J. C. Penney re-imagine what I believe to be the single greatest opportunity in American retailing today, the department store,” Johnson said in a statement.
Johnson, 52, has served for the past 11 years as senior VP of retail at Apple, where he led its overall retail strategy. Under his direction, Apple stores achieved a record level of growth, exceeding a billion dollars in annual sales within two years of their debut. Apple today operates some 325 stores around the globe, and contributes a reported 13% to Apple’s bottom line.
Johnson joined Apple after 15 years at Target Corp., where his last role was VP of merchandising. He is credited with developing new initiatives for branding, marketing and merchandising that helped set the chain apart.
Johnson’s departure to join J.C. Penney caught many by surprise. It comes when Apple’s stores are flourishing and the company is getting ready to ramp up its international expansion. However, many insiders speculated that Johnson could not pass up the chance to run a company.
According to various published reports, the department store chain first contacted Johnson three or four years ago. The more recent wooing started in November after activist investors Pershing Square Capital Management and Vornado Realty Trust bought 26.4% of J.C. Penney stock.
Johnson is investing $50 million of his own money in J. C. Penney by buying warrants on the company’s stock. In 2017, the warrants will give him the right to buy more than seven million shares at $29.92 a share, meaning that if he can raise the stock price he stands to make a big profit.
During his time at Apple, Johnson received total compensation valued at $141 million, according to the executive compensation firm Equilar, the New York Times reported. The analysis excludes the years 2008 and 2009, during which Johnson realized additional stock gains valued at more than $100 million, according to the report.
Johnson arrives at J.C. Penney as the chain is coping with the slowing economic recovery, still high unemployment and surging costs for cotton and other materials.
“It’s our job to rethink everything,” Johnson said in a telephone interview with Bloomberg. “Retailing’s always been about creativity, it’s about creating exciting new ways for people to shop, new products for people to purchase, new ways to do things.