Ron Johnson lasted just 17 months as CEO of JC Penney.
A JC Penney spokeswoman confirmed that Mr. Johnson is stepping down and will be replaced by his predecessor, Myron "Mike" Ullman, effective immediately. Mr. Ullman has also been elected to the Board of Directors.
"We are fortunate to have someone with Mike's proven experience and leadership abilities to take the reins at the company at this important time," said Thomas Engibous, chairman of the board of directors, in a statement. "He is well-positioned to quickly analyze the situation JC Penney faces and take steps to improve the company's performance."
JC Penney's returning CEO will waste no time in assessing how much has changed since he departed in late 2011. "While JC Penney has faced a difficult period, its legacy as a leader in American retailing is an asset that can be built upon and leveraged," Mr. Ullman said in a statement. "To that end, my plan is to immediately engage with the company's customers, team members, vendors and shareholders, to understand their needs, views and insights. With that knowledge, I will work with the leadership team and the board to develop and clearly articulate a game plan to establish a foundation for future success."
Mr. Engibous also thanked Mr. Johnson for his "contributions" and wished him the best in his "future endeavors." When Mr. Johnson was hired he was set to receive a base salary of $1.5 million and get an annual target bonus equal to 125% of his pay, according to a regulatory filing. In a preview of how the board of director's was feeling about Mr. Johnson's performance as of late, he did not receive any stock awards in 2012, bringing his pay down to $1.9 million from $53.3 million in 2011.
Mr. Johnson's grand vision for reinventing the department store retailer was unveiled with great fanfare just over a year ago. At the time, analysts and industry watchers alike greeted it with enthusiasm, applauding the exec's desire to modernize an aging giant. Competitors watched closely -- if the hotshot from Apple could wean customers off of discounts and coupons, it would be nothing short of revolutionary for the retail category. A whole host of talented executives, many from Apple, but also from brands like Target, Nordstrom and Piper Jaffray, rushed to join Mr. Johnson in Plano, Texas.
But Mr. Johnson's vision did not live up to the hype. Not even close.
Just months into the turnaround plan, with sales slumping double-digits, Mr. Johnson upended JC Penney's marketing approach. The thick, brightly colored monthly catalogs were out, as were the upbeat, brand-focused TV commercials with monthly themes. And Michael Francis, lured from Target to oversee merchandising and marketing, was unceremoniously ousted after just eight months.
Since then, Mr. Johnson has changed tack again and again -- all the while chipping away at his original vision as sales fell further and further. Coupons were brought back -- though Mr. Johnson still referred to them as "gifts" -- sales and clearance also reappeared. And, most recently, the retailer returned to the strategy of raising prices on brands it owns and then discounting them as a way to attract bargain-conscious shoppers and boost profits. It's a practice Mr. Johnson once criticized.
Mr. Johnson has also been embroiled in a lawsuit between JC Penney, Macy's and Martha Stewart, as of late. The trio returned to court this week after a month-long mediation proved useless. Losing the case could further pinch the ailing retailer, which had been banking on Martha Stewart to boost business. Already, it saw sales plummet 25% in 2012, even as measured media spending jumped 14% to $504 million.