A J.C. Penney store in Daly City, Calif. (Photo: Justin Sullivan, Getty Images)
John Waggoner, USA TODAY
USA TODAY - J.C. Penney's chairman of the board fired back at hedge-fund manager William Ackman, also a member of the retailer's board, who has called for current CEO Myron Ullmann III to resign as CEO.
In an unusual public statement, J.C. Penney's chairman, Thomas Engibous, disparaged Ackman's criticism of the company. Ackman's "latest actions are disruptive and counterproductive at an important stage in the Company's recovery," the statement said. "The Company has made significant progress since Myron E. (Mike) Ullman III returned as CEO four months ago, under unusually difficult circumstances."
The furor started Thursday, when Ackman wrote a letter to the board, urging it to quickly replace Ullman. Ackman's letter also suggested Neiman Marcus CEO Allen Questrom as a replacement for Engibous.
Among the letter's charges:
•"In recent weeks, our board has ceased to function effectively.Material information is not being properly shared with the board, and the board does not have access to independent advice."
•" Material hiring and firing decisions are being made without the board being properly consulted."
•"In light of the uncertainty about our projections, I am also extremely troubled about the aggressive inventory purchases and future commitments we are making for later this year and 2014."
J.C. Penney stock swooned to $13 a share Friday, down from $22 in February. The store, known for its frequent sales, chose to move to an everyday low pricing model, eliminating sales. The decision was disastrous for the company, which saw sales plunge 25% in the last fiscal year.
The New York Post reported last week that commercial lender CIT was refusing to support deliveries from some small suppliers to Penney. CIT would not comment; Penney denied the story and said its major suppliers were all continuing to do business with the chain.
While that bad press lingered, the retailer announced Monday that it hired a new marketing chief from Kraft. The market reaction was unfavorable, however, because Debra Berman lacks retail experience.