* Says Johnson's physical absence hurt
* Thinks stock is still worth $75/share
* Says prepared to pour in more capital as needed
* Shares close up nearly 5.5 percent
By Martinne Geller
NEW YORK, April 11 J.C. Penney Co Inc
board member William Ackman on Thursday acknowledged the
shortcomings of the chief executive officer he handpicked to
turn around the retailer and said he was optimistic about the
company and its future.
Speaking at a luncheon in New York, Ackman said Penney's
former CEO Ron Johnson was not at the company's Texas
headquarters enough, since his family lives in California. Even
though Johnson worked hard, Ackman said the lack of his physical
presence "affected the morale of the home team."
This is the first time Ackman, a J.C. Penney board member
since 2011, has spoken publicly since Johnson, the Apple
alum he chose to lead the turnaround, was dismissed
from his position on Monday.
He described Johnson as being brilliant and visionary, but
said the team lacked strong enough operational talent.
"The execution, the basic blocking and tackling of running a
retailer -- that's what Ron (Johnson) didn't have," Ackman said.
For that, he called out Mike Kramer, the chief operating
officer, who has left the company, he said. A media report late
on Wednesday said three more executives, including Kramer, left
J.C. Penney's stock price tumbled 27.6 percent in the first
quarter as Johnson's plans to upgrade the store's merchandise
and streamline its pricing structure, which had long relied on
coupons, alienated the store's long-time clientele but failed to
draw in new customers.
Ackman's hedge fund, Pershing Square Capital Management,
owns an 18 percent stake in J.C. Penney. The company's troubles
have left his portfolio with some $500 million in losses.
The board has now turned to Myron Ullman, Johnson's
predecessor. In the past, Ackman had been openly critical of
Ullman, saying as recently as last May that the department store
operator had been chronically mismanaged and had failed to
create value for shareholders for the last 20 years.
What the company needs now though, is somebody who can
"stabilize the place" and "calm the vendors", Ackman said,
calling Ullman "the right guy at the right time".
The company will return to offering newspaper circulars
shortly, Ackman said.
J.C. Penney was not immediately available for comment.
Johnson could not be reached for comment.
OFF THE RECORD
At the luncheon, which was attended by hundreds of people
and sponsored by New York University's Schack Institute of Real
Estate, Ackman had asked for his comments on J.C. Penney to be
off the record. No reporters objected at the time, though his
comments were soon reported by other news outlets.
Reuters attended the luncheon, which was part of an annual
real estate conference at which Ackman is often a panelist.
At the same time Ackman was speaking, a New York state judge
urged J.C. Penney and rival Macy's to settle their lawsuit
over who can sell home goods bearing the name of domestic
doyenne Martha Stewart.
The two companies have been battling since 2011 when J.C.
Penney said it would open "Martha Stewart" stores within J.C.
Penney stores. Macy's claims it has exclusive rights to make and
sell Martha Stewart products.
Ackman did not address the lawsuit.
While acknowledging Johnson's mistakes, Ackman also
reiterated his belief in J.C. Penney's future, saying its shares
should still be worth $75 each.
The shares ended up 77 cents, or 5.46 percent, at $14.86 on
the New York Stock Exchange.
"I don't see a scenario in which we don't work this thing
out," Ackman said, adding that he and other shareholders were
prepared to pour in more capital as needed. "The company will