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JCP Under Pressure to Replace Ullman, Stock Falls

According to CNBC, JCPenney is also searching for a new CEO, under pressure from activist investor Bill Ackman. Ackman was instrumental in the installation and removal of former CEO Ron Johnson.

CNBC claims to have obtained a letter sent to the JCP board by Ackman, expressing frustration that the search for a new leader has not advanced more rapidly. He wants a new CEO in the next 30 – 45 days.

Ackman expressed serious concern over the state of affairs at JCP, writing that, “We need a CEO with extensive, ideally department store experience, strong operational skills, and a strong public company track record.”

Ackman apparently spoke to former CEO Allen Questrom, who conditionally agreed to return as the Chairman of JCP, a choice that would need to be confirmed by the board. In his letter, Ackman pointed out that Questrom had saved the company before, bringing its stock price up by nearly $26 a share over his four year tenure.

Questrom was interviewed by CNBC and said that he would not return to the retailer under hostile circumstances. He also stated that the retailer would have to hire a CEO who he approved of, and that the process should take no more than 45 days. He expressed his support for Ullman, who was at the helm of JCP before Ron Johnson.

JCP stock fell nearly 4 percent today on another rumor, after traders caught wind that chief financial officer Ken Hannah might be departing.

JCP denied the rumors, stating that Hannah is a key part of CEO Mike Ullman’s “go-forward leadership team” which recently expanded to include senior vice president of marketing Debra Berman.

The company’s stock has been buffeted twice by rumors in two weeks. Shares fell over concerns about the firm’s cash burn rate last week. The stock tumbled 10.2 percent on July 31st. There were also rumors that CIT would stop approval on vendor shipments for January, but the company had actually just asked vendors to provide more information.

The retailer has been featuring more promotions and is betting big on back to school and the upcoming holiday season. So far, the efforts haven’t translated into higher store traffic, but JCP will release second quarter earnings on August 20th, which should give more detailed information about the company’s financial position.