NEW YORK (AP) — Activist investor Bill Ackman said Friday he has lost confidence in J.C. Penney’s board and its chairman should be replaced.
The statement is the latest development in the increasingly public squabble between Ackman, whose Pershing Square management has a nearly 18 percent stake in the company, and the rest of J.C. Penney’s board.
The disagreement is over how long it will take to find a new CEO for J.C. Penney. Ackman says the process should take 30 to 45 days. The board has said CEO Mike Ullman is the right person for the job for now.
In a lengthy letter to the board, Ackman complained that Chairman Thomas Engibous didn’t call a proper meeting to discuss his views that J.C. Penney’s search process should be sped up.
“Boards must have the ability to deliberate openly amongst one another so that all points of view can be adequately discussed,” he said. “By not calling a meeting, Tom prevented the board from properly functioning and fulfilling its fiduciary duties.”
He also questioned the board’s hiring and firing practices and “aggressive” inventory purchases.
Ackman has suggested former CEO Allen Questrom should replace Engibous. Questrom said Thursday that he would rejoin the company but not under a hostile board situation and only if he agreed with the choice of the next CEO.
Ullman, who had been Penney’s CEO from 2004 to 2011, took back the reins in April. He took over from Ron Johnson, who was supported by Ackman but was ousted after 17 months on the job after his radical makeover of the chain led to disastrous massive losses and sales declines.
Ullman has been working to stabilize the business by bringing back basic merchandise and more frequent sales that were eliminated by Johnson in a bid to attract younger, hipper customers. But some analysts believe that while traffic is improving, there has been no evidence of a turnaround yet as the company heads into the bulk of the critical back-to-school shopping period. Moreover, concerns are growing about Penney’s financial liquidity.
Analysts had expected Ullman’s reign the second time around would be transitional until Penney hired a replacement.
The squabble comes ahead of Plano, Texas-based Penney’s second-quarter results scheduled to be released Aug. 20.
Shares fell 88 cents, or 6.4 percent, to $12.79 during midday trading, after rising the same amount on Thursday. The stock has traded between $12.50 and $32.55 over the past 52 weeks.
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