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UPDATE: Penney Chairman Engibous Says CEO Search Will Be 'Careful and Deliberate'

Friday August 9th, 2013 - 11:19AM


The JC Penney CEO search has taken another twist with Thomas Engibous, Penney's current chairman, responding to a recently published letter from lead investor Bill Ackman urging prompt hiring of a replacement for current CEO Myron (Mike) Ullman. According to a Reuters report Engibous expressed disappointment that Ackman's letter was made public and indicated that, "the CEO search process, which began in earnest three weeks ago, will be careful and deliberate to ensure we find the right long-term leader for J.C. Penney."

In a letter written to fellow board members on August 8 Bill Ackman, one of J.C. Penny's largest shareholders, pushed for the company to have a new CEO in place in 30 to 45 days. He also, according to published reports, indicated that another former Penney CEO, Allen Questrom may be returning to the company.

"Questrom said that he would only consider a return to the embattled retailer under the right conditions — adding that he would not come back under hostile circumstances," according to a CNBC report.

According to Ackman's letter, J.C. Penney stock rose from $13.94 to $39.10 during Questrom's time with the company. The company's stock hit a twelve and a half year low earlier this week, CNBC noted.

Ullman served as CEO prior to Ron Johnson's hiring in November 2011. Under Johnson, the company took a sharp turn in a new direction, steering away from its promotional pricing strategy in favor of a flatter pricing policy less reliant on sales events. Johnson, was dismissed in April 2013 amid sharply declining sales at the retailer.

In Ackman's letter, he expressed concern with the future of the company and frustration with the pace of the search. He stated that he supported the decision to bring Ullman back, but under the circumstances that a search for a long-term CEO would begin immediately.

In his response, Engibous credited Ullman for the progress he has made over the last four months given the "unusually difficult circumstances" and also called him the "right person to rebuild J.C. Penney."

"Mike is the right person to rebuild JC Penney by stabilizing its operations, restoring confidence among our vendors, and getting customers back in our stores. He has the overwhelming support of the Board of Directors, and we are confident the Company is in good hands," Engibous said in his letter.