★ Ron Johnson Joining J.C. Penny as CEO

WSJ:

Mr. Johnson, 52 years old, will become CEO in November, succeeding long-time leader Myron “Mike” Ullman. Mr. Ullman, who has been CEO and chairman for six and a half years, will become executive chairman.

and

The hire is a rare loss of a senior executive at Apple, which has seen its stock and brand image soar following a string of hit products like the iPhone and iPad. The appointment could prove lucrative for Mr. Johnson, but he’s taking on a big risk that he can improve the value of J.C. Penney’s stock.

In filings Tuesday, J.C. Penney said it would make Mr. Johnson whole for $50 million in soon-to-vest equity awards that the executive is leaving behind at Apple. Mr. Johnson will then pay just under $50 million – or $6.89 a share—for warrants to buy 7.26 million shares of Penney stock. The warrants can be exercised six years from now at $29.92 a share, which could mean a big payday for Mr. Johnson if he can get the stock up.

Mr. Johnson will also get a salary of $1.5 million and a shot at an annual bonus.

With his appointment, Mr. Johnson is in a position to reinvent the tired department store retail experience. Mr. Johnson has won kudos for reimagining the concept of the retail store at Apple, which have become one of the most popular destinations in the otherwise barren mall landscape. Apparel retailers have long admired Apple’s store environments, including their spare, uncluttered layout and use of handheld checkout devices.

This will absolutely be more similar to Johnson’s work at Target and less like his work at Apple. However, at Target, he was leading Merchandising as an executive and then became a VP of Apple’s Retail operation. Now, he’s running the show at J.C. Penny.

The reason I compare this role to his at Target is that Apple, led by Steve Jobs, is an experience company that sells few products that were not made in-house. The Apple Store is 50% Genius / Creative Bar, 40% Apple Hardware and 10% 3PP (third party products). I don’t mention the cash wrap because, in new stores, there isn’t one and employees use portable scanners.

Where Johnson completely rocked at Target and at Apple is the organization in retail and day to day operations. Retail was an extraordinarily tight ship when I was there. Products moved in to customer’s hands just as quickly as they arrived. Security was top notch, training and customer interactions were huge and service was key. There could be 150 people in our 30′ store and only 12 team members on duty (2 managers, 4 full timers, 2 geniuses and 4 part timers) and everything was efficiently handled. Johnson set that up and the experience was flawless for our customers.

He has a crap load of work to do at J.C. Penny. If you worked in an Apple Store and then walked across the way and got a job at JCP, you’d be slitting your wristbefore your first lunch break. It is a hell of a place and I have a huge respect for him because this move is a huge bet but also the timing is perfect.

Apple retail is positioned to continue a decade of great things. Everything is in place. Ron Johnson has cashed out enough vested stock options to be set for life even if he lived in Mountain View with a summer home in France. He’s set for life! With this move, he’ll have finally earned the title of CEO and, that 50 million dollar stock purchase he made proves he means to stay for a long time and help JCP revitalize their stores and image.

I have full faith he’ll be able to do it. I shopped at JCP as a kid but the 30 year old cash registers, millions of bucks in overstock merchandise and shoe department that had carpet that was installed in the 60s has kept me away. I just can’t shop there anymore. Johnson has a lot of work to do and I wish him all the best.  of note, as a manager at Apple, he was only 5 spots ahead of me in the retail group and we chatted briefly at lunch in Cafe Macs once. He’s a genius and everyone in retail will miss him.