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Director urges speedier search for Penney CEO

J.C. Penney’s shares jumped after word got out of William A. Ackman’s letter.

Brendan McDermid/Reuters

J.C. Penney’s shares jumped after word got out of William A. Ackman’s letter.

William A. Ackman isn’t happy with the status quo of J.C. Penney once more — and that has made other shareholders in the struggling department store chain fairly pleased.

Shares of J.C. Penney Co. rose 86 cents to $13.66 Thursday, after CNBC reported that Ackman had written a letter to his fellow board members urging them to speed up a search for a permanent chief executive. He suggested that the directors could find a new leader within 30 to 45 days.

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Ackman added in the letter that Allen Questrom, a retail veteran who turned around Penney once before, had indicated a willingness to return if the board picked an acceptable chief executive.

The correspondence highlights yet the latest headache bedeviling Penney, which brought back former chief executive Myron Ullman after firing Ron Johnson as chief executive in April. Johnson, a former head of Apple Inc.’s vaunted retail operations whom Ackman championed, was chosen to revive a department store chain that had fallen on hard times. But his retail strategies, including doing away with discount sales, only alienated the customers.

Ullman, who was displaced by Johnson in the first place, had been brought back with the understanding that he would stabilize the badly listing company. At that time, Ackman had expressed hope that Penney could find a permanent leader soon. Four months later, however, the board’s newly appointed search committee and its headhunter firm have barely begun their work, according to the hedge fund manager’s letter.

Ackman described the potential universe of candidates as limited. The letter, the text of which was posted to CNBC’s website, reads: “We need a CEO with extensive, ideally department-store retail experience, strong operational skills, and a strong public company track record. When non-competes, geographical considerations, and other personal and timing issues are considered, the number of potential CEO candidates is quite limited.”

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