First it was the JCPetanic [6], then the JCPanic, then it became the JCPandemonium [7], and moments ago, the situation at the doomed retailer was downgraded once again, this time simply to JCPathetic, as the cash-burning, slow motion circus crash lurches from farce to farce, the latest news being that in a long overdue move, Bill Ackman has thrown in the towel on JCPenney and has resigned from the board.
Just released:
J. C. Penney Company, Inc. (JCP) ("the Company") today announced a series of actions related to its Board of Directors. First, William A. Ackman of Pershing Square Capital Management has resigned from the Board effective Aug. 12, 2013.
The Company also announced that Ronald W. Tysoe, a highly respected retail industry executive who spent 16 years as Vice Chairman at Federated Department Stores Inc. (now Macy`s, Inc.), has been elected to the Board also effective Aug. 12, 2013. In addition, the Board said that it intends to name another highly qualified new director in the near future.
Thomas Engibous, Chairman of the Board of Directors, said, "The Company is extremely fortunate to have the benefit of Ron Tysoe`s judgment and experience at this important time. His deep knowledge of the retail industry and his financial expertise will be invaluable to us as we continue the work underway to return J. C. Penney to profitability and growth. I would like to thank Bill Ackman for his service on the Board over the past two years."
Mr. Ackman said, "During my time on the J. C. Penney Board of Directors, I have always advocated for what I believe to be in the best interests of the Company - its stockholders, employees and others. At this time, I believe that the addition of two new directors and my stepping down from the Board is the most constructive way forward for J. C. Penney and all other parties involved."
Mr. Tysoe said, "J. C. Penney is one of America`s great companies, and I am very happy to be joining the Board of Directors. I look forward to working collaboratively with the rest of the Board and management to advance the turnaround currently underway."
The Board today also reaffirmed its overwhelming support for Chief Executive Officer Myron E. (Mike) Ullman, III and for Chairman Thomas Engibous, both of whom have been working tirelessly to position the Company for future success. This important work has included stabilizing the Company`s operations and financial position, restoring confidence among vendors, and taking steps to get customers back into stores.
The Board expresses its deep appreciation for the efforts of the Company`s 116,000 associates, who continue to provide outstanding service to J. C. Penney`s customers during the back-to-school season. It is also grateful to the many vendors and other business partners, as well as stockholders, who have taken the opportunity during the past week to express their confidence in the Company`s leadership and its current path.
Ronald W. Tysoe has over 20 years of retail, finance and real estate investment industry experience. He served as a member of the Board of Directors of Federated Department Stores Inc. from 1988 to 2005, as Vice Chairman for Finance and Real Estate from 1990 to 2006, and as Chief Financial Officer from 1990 to 1997.
Mr. Tysoe currently serves on the boards of the Canadian Imperial Bank of Commerce (CM), Scripps Networks Interactive (SNI), Cintas Corporation (CTAS), and Taubman Centers, Inc. (TCO). He received his Bachelor of Commerce and Bachelor of Law degrees from the University of British Columbia.
Does this mean Ackman will next be offloading his nearly 40 million JCP shares next, and just who will buy them if that is the case, we shall find out shortly. Also, maybe the company can provide an update on what is really important: its nearly (or maybe it is now more than) $2 million per day cash burn rate.
Finally, when it comes to JCP's corporate governance, the only question is which CRO the official (or unofficial) creditor committee will end up appointing as part of the company's inevitable restructuring under Chapter 11 of the US bankruptcy code.