We all know about the continued success of Apple's retail store operations. It seems everytime one walks into an Apple store, the amount of people per square foot also present can be astounding. That said, another retailer is hoping to bring the same magic and mystique to their stores, as J.C. Penney has tagged Ron Johnson of Apple as its next chief executive.
It will certainly be an interesting switch for Johnson, going from the spaces of iPhones and iPads to Penney's floors of product lined up everywhere.
How Apple responds to Johnson's departure could be interesting, as Cupertino has put a large emphasis on their stores, and continues to expand internationally. Apple has also been continually looking to their top managers with CEO Steve Jobs on medical leave.
The plan is for Johnson, 52 years old, to take over on November 1, where he will succeed Myron Ullman, 64, who has been the chief executive for over six years. Ullman will stay on as executive chairman.
Wall Street investors seemed to give the move their seal of approval as Penney's shares went up 17.5 percent on Tuesday to $35.37, which added more than $1.2 billion to Penney's market value.
Why leave the U.S.'s second most valuable company though? Johnson stated he was wanting a new challenge, and decided to leave Apple at a high point. "The department store is kind of king of the hill in most countries I go to," he said. "They should be the leader, and that's what we want to achieve at J.C. Penney."
Interestingly though, Johnson's departure also presents some financial risk to him. The company is issuing him $50 million in stock to compensate for soon-to-vest equity awards that he leaves behind at Apple. Shortly thereafter, Johnson will turn right around and pay just under $50 million for warrants to buy 7.26 million shares of Penney stock. Those warrants can then be exercised six years from now at $29.92 a share, if Johnson can get the stock to go up. If not, then his $50 million is at risk.
via The Wall Street Journal
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