“Don’t Go, Apple Guy!” – Who’s Heartbroken Over Ron Johnson’s Booting From JC Penney

So, Ron Johnson, onetime Apple (AAPL) retail genius, has been shown the exit at JC Penney (JCP), less than 18 months after his failed grand experiment to remake the department-store chain began. The board has sheepishly rehired Myron Ullman, the guy who got booted to make way for Johnson, to try to clean up his mess.

Even in its diminished state—its sales fell 25% last year—JC Penney is a huge player in the retail industry, and the tough decisions Ullman and the Penney board now have to make will create clear winners and losers. JC Penney desperately needs to win back customers, but it’s so low on cash that the new CEO will feel pressure to close stores, delay remodeling and cut advertising. That’s great news for its rivals; not so good for its suppliers, brand partners and landlords.

LOSERS

Simon Property Group (SPG): The Wall Street Journal has already been whispering about possible JC Penney store closures. Simon, one of its biggest landlords, could be hurt if JC Penney shutters low-grade mall locations—and it’s got plenty of those—that would be tough to fill with a new tenant.

Time Warner (TWX): Johnson spent heavily on splashy ads in magazines such as Time Warner’s InStyle and People StyleWatch. In fact, JC Penney was the biggest single advertiser in the leading women’s fashion magazines last year, buying 160 ad pages in four of the top seven, according to a Business Insider story. No way can Ullman afford to repeat that extravagance.

SPG Chart

SPG data by YCharts

Loblaw Companies, traded under the symbol “L” on the Toronto Stock Exchange: In hindsight, maybe JC Penney wasn’t the most promising retail partner to choose for the U.S. expansion of colorful clothing brand Joe Fresh, owned by Loblaw, Canada’s largest grocery chain. Bad publicity and store closings will be a one-two punch.

WINNERS

Macy’s (M): As JC Penney has lost shoppers over the past year, Macy’s has gleefully lured them in with its coupons and constant sales. While Ullman sorts out where an unstable JC Penney can possibly go from here, Macy’s will continue to benefit. Also, Johnson’s demise is a personal victory for Macy’s CEO Terry Lundgren.

Martha Stewart Living Omnimedia (MSO): JC Penney and Macy’s have been waging an ugly court battle over whether Martha Stewart can sell a new line of home goods in JC Penney’s stores. Settlement talks broke down, the New York Times reported, and really, Ullman has too much on his plate right now to fight the way Johnson did. He’s likely to bow out or strike an easy settlement, allowing Martha to mend hurt feelings with Macy’s, who’s clearly the stronger partner.

M Chart

M data by YCharts

Icahn Enterprises LP (IEP): Carl Icahn likes nothing better than to see his arch-nemesis Bill Ackman, CEO of hedge fund Pershing Square Capital Management, take a hit. Ackman championed Johnson to the JC Penney board and now has to deal with the fallout. With his judgment in doubt, Icahn’s position in the ongoing Herbalife (HLF) spat is looking more attractive.

Amy Merrick, a contributing editor at YCharts, is a former staff reporter for the Wall Street Journal, where she spent 11 years writing about the Midwest economy, state and municipal finances, and the retail and banking industries. Her work has been published in the Poynter Institute’s Best Newspaper Writing series. She can be reached at editor@ycharts.com.

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