A fight has broken out between JC Penney and Bill Ackman, the hedge fund manager on the retailer’s board, after he urged the company publicly to find a new chief executive in 30 to 45 days.
The department store’s chairman on Thursday issued a coruscating statement saying other directors were “extremely disappointed” with Mr Ackman and backed its current chief executive, Mike Ullman.
The spat complicates JC Penney’s efforts to recover from the disastrous tenure of Ron Johnson, a former Apple executive who Mr Ackman installed as its chief, only to watch him lose $13bn of sales in 12 months.
In April the board ousted Mr Johnson – who had alienated customers by scrapping discounts and trying to be trendier – and replaced him with Mike Ullman, a former chief executive who Mr Ackman had helped to push out to bring in Mr Johnson.
Mr Ackman is a divisive figure who has riled other big investors as well as the underperforming companies he has targeted, including the Canadian Pacific railroad and Procter & Gamble, whose chief executive he helped oust in May.
Unhappy with signs that Mr Ullman was settling in, and not acting as an interim leader, Mr Ackman last month threatened to sell his 18 per cent stake in the retailer if it did not start looking for a new boss, said a person familiar with the situation.
The board began the search process three weeks ago. But on Thursday, Mr Ackman sent a letter to the board calling for a new leader to be found quickly, but he released it to the CNBC network at the same time.
Thomas Engibous, JC Penney’s chairman, said: “[Mr Ackman’s] latest actions are disruptive and counterproductive at an important stage in the company’s recovery.”
He also highlighted Mr Ackman’s role in “leading a campaign” to appoint Mr Johnson, “under whose leadership performance deteriorated precipitously”.
In common with other storied department stores such as Sears, JC Penney is struggling to define a role for itself in an era where a growing amount of clothes shopping is happening at fast fashion stores such as Zara and online.
Mr Ackman told the Financial Times: “I am not going to allow this great iconic American company to die under my watch.
“Mike Ullman was hired as an interim CEO to help us complete the financing and stabilise the company, before searching for a new chief executive. Delay is holding the company back.”
Mr Engibous said the company had made “significant progress” under Mr Ullman.
“Mike is the right person to rebuild JC Penney by stabilising its operations, restoring confidence among our vendors, and getting customers back in our stores,” he said.
“He has the overwhelming support of the board of directors, and we are confident the company is in good hands.”
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