Plano, TX—After seeing its shares plummet on Wednesday to their lowest in more than 12 years, JCPenney saw its shares jump nearly 8%, hitting a high of $14.13 earlier in the day.
Once again the department store’s shares were volatile on the latest rumor: that JCPenney is looking for a permanent chief executive to replace Myron “Mike” Ullman, the former chief executive who returned to the post in April after CEO Ron Johnson was fired.
The search was been revved up apparently by William Ackman, whose Pershing Square Capital Management hedge fund is JCPenney’s largest shareholder. Ackman sent a letter to the company’s board expressing frustration with the CEO search process.
“Ackman is frustrated the search hasn’t gone fast enough, saying it should have started back in April, and there should have been candidates 30 to 45 days later.” But the search process didn’t get going until July 21st, complains Ackman,” said Scott Wapner of CNBC who got a copy of the letter.
Questrom to Return?
“More significant, Ackman says in his letter he has gotten former Penney CEO Allen Questrom to agree to come back as chairman of the board, “so long as he agrees with the new CEO candidate,” Wapner added.
Ackman wants the board to find a permanent chief executive in the next 30 to 45 days. “We need a CEO with extensive, ideally department-store retail experience, strong operational skills, and a strong public company track record,” Ackman wrote.
Wapner later had an on-air telephone interview with Questrom who was asked why he would return to JCPenney.
“I am not coming back as chairman. I said I would consider it, under the right conditions,” Questrom said. “One of the board members asked me several months ago if I would, and I said, under right conditions. I said I didn’t want to come back with a hostile board, and that it had to be with a CEO I was comfortable with, and they had to be comfortable with me. So, that’s a lot of conditions.”
When asked what his “level of confidence” that JCPenney can be turned around, Questrom replied: “I don’t know enough about it now, I’ve been out of it so long. Every day that goes by it becomes more and more difficult to see it’s possible. It’s a great brand, but there have been lot of bad decisions in the last year or so. I’ll put it a different way: It’s such a great history, you wouldn’t want to give up until it’s dead.”
Questrom, 73, now serves as a senior advisor of Lee Equity Partners, LLC.
He served as chairman/ceo at JCPenney Co from 2000 to 2004 and as chairman/ceo at Federated Department Stores from 1990 to 1997. He also served as president/ceo at Neiman-Marcus Group from 1988 to 1990. Additionally, Questrom served as the chairman of Barneys New York, Inc., from 1999 to 2001.