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JC Penney announced yesterday that Ron Johnson, one of the forces behind the Apple Store who was hired 17 months ago to re-engineer the department store chain, has been fired. In many circles, the move was seen as inevitable - sales, profits and traffic have plummeted as Johnson looked to reinvent the store experience as a collection of branded boutiques, and change the chain's pricing profile from coupon and promotion-driven to EDLP.

He will be replaced by Myron E. Ullman III, who was CEO of JCP for seven years before being ousted in favor of Johnson.

In its coverage of the story, the New York Times writes: "It is a curious move to go back to Mr. Ullman. Most of the senior employees that he had assembled at Penney either left or were dismissed by Mr. Johnson. And it was dissatisfaction with where Mr. Ullman was taking the company that led Mr. Ackman to look for another leader in the first place. Though profitable, Penney was seen as a mediocre retailer that was losing ground to competitors like Macy’s and Kohl’s.

"Now, it is unprofitable, still losing ground to Macy’s and Kohl’s, and in the midst of a very expensive turnaround, the future of which is uncertain. Though some of Mr. Johnson’s plans can no doubt be jettisoned, his new merchandise is arriving in stores, the stores are undergoing extensive renovations, and Penney has already revised pricing several times. The company is also fighting Macy’s in court over Penney’s attempt to sell Martha Stewart home goods in its stores."

Johnson is criticized for making sweeping changes without doing any testing, and for imposing a grand view on the chain rather than phasing it in gradually.

The Times notes that during Johnson's tenure, the company's stock price has dropped more than 50 percent; JCP "reported a $552 million loss for the last quarter, along with more than $4 billion in revenue that evaporated in all of 2012."
KC's View:
It is hard to defend what Ron Johnson did, simply because the results have been so stark. But I would argue that is remains entirely possible that his vision of what JC Penney needs to become could be the right one, and that it was his implementation that was, to say the least, flawed.

I'm not sure that asking for a do-over, by hiring the old CEO, is the right move. Though maybe he was the only real choice, considering that he at least knows the terrain; the learning curve will be a lot less formidable.

It does make me wonder about JCP's board of directors. They hired one guy, didn't like his vision and implementation, so they fired him and hired another guy. Then, when that didn't work out, they hired back the old guy. Not sure here what the vision is.

Or if there is any.