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The latest critic to blast JCPenney CEO Ron Johnson? The man who hired him.
Hedge-fund tycoon Bill Ackman — who as Penney’s biggest investor recruited Johnson in 2011 from Apple in a bid to revamp the retailer — admitted yesterday that Johnson’s impact on the department-store chain has been “something very close to a disaster.”
Ackman had been a relentless cheerleader for Johnson, despite a series of gaffes last year that fueled a 25 percent sales drop and an operating loss of nearly $1 billion.
But at a Boston investor conference yesterday, where Ackman said he wore socks purchased at JCPenney to signal his commitment to the brand, the money manager let loose.
Johnson made “big mistakes” as he drastically changed the retailer’s pricing and merchandise strategies, according to Ackman.
“One of the big mistakes was perhaps too much change too quickly without adequate testing on what the impact would be,” Ackman said, finally admitting what many critics have been saying for more than a year.
Penney shares — which have taken a beating on worries that Johnson’s botched turnaround has damaged the retailer beyond repair — jumped as much as 7.3 percent yesterday before closing up 2.5 percent at $15.45.
“It’s hopeful that Ackman is no longer drinking Ron Johnson’s Kool-Aid,” one frustrated Penney shareholder told The Post yesterday. “This is confirmation that they’re focused on a new game plan, whatever it is.”
As recently as late February, Ackman had vigorously defended Johnson, complaining that the media were “very negative” and that Johnson was “picked on more than any other CEO in the country.”
Yesterday, Ackman — whose hedge fund Pershing Square Capital Management is now $500 million under water on its Penney investment — backed away, saying, “I don’t know what the date of that comment is.”
“The criticism is deserved,” said Ackman, who is a Penney board member. “The buck stops with him, he’s CEO of the company. If it’s failing on his watch, he deserves, and the board deserves, responsibility for that.”
Among Johnson’s critics is former Penney CEO Allen Questrom, a legendary merchant who last month pegged the chances of a successful turnaround under Johnson at “one in a hundred or one in a thousand.”
In an interview with the Dallas Morning News, Questrom said Johnson took him on a tour of a prototype store last week and still appears determined to pursue a costly rollout of in-store boutiques without first doing market research.
“The shops are very creative, very well done,” Questrom said.
Nevertheless, “they want to do this without testing it first,” the respected retail veteran added. “I think they should find out if it works first without putting the whole company at risk.”