UPDATE 4-Ackman pushes J.C. Penney to speed up CEO search

Thu Aug 8, 2013 6:57pm EDT
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(Adds comments from J.C. Penney's chairman)

Aug 8 (Reuters) - J.C. Penney Co has started searching for a new chief executive to replace Myron Ullman, with top investor Bill Ackman pushing to have one named in 30 to 45 days, according to a letter the activist investor sent to the company's board.

Ackman, frustrated by the slow pace of the CEO search, also told fellow Penney board members that Allen Questrom, a former Penney CEO, would return as chairman if the department store operator chose a new CEO he liked.

"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," Thomas Engibous, Penney's current chairman, said on Thursday evening.

Engibous also stressed that Ullman had the overwhelming support of the board and was "the right person to rebuild J.C. Penney by stabilizing its operations, restoring confidence among our vendors, and getting customers back in our stores."

The board "strongly disagrees" with Ackman and was "extremely disappointed" that his letter was made public, Engibous said. He also called Ackman's latest move "disruptive and counterproductive."

It is the second time since 2011 that Ackman has pushed for Ullman's departure.

Ullman, who was the CEO from 2004 to 2011, was brought back in April to stem a sales hemorrhage blamed on Ron Johnson, who was picked by Ackman in 2011 to remake the 111-year-old retailer as a trendier department store.

But on Johnson's watch, sales fell 25 percent last fiscal year as shoppers rejected his no-discounts pricing strategy and the company had to get $2.25 billion in financing to quiet concerns about its financial health.   Continued...