J.C. Penney Lures Apple's Retail Chief for CEO Spot

J.C. Penney (NYSE:JCP) scored a hiring coup on Tuesday as the department-store chain tapped Apple (NASDAQ:AAPL) retail chief Ron Johnson as its new president and eventual CEO.

Reports about the potential hire and subsequent announcement sent shares of Plano, Tex.-based J.C. Penney rallying more than 10% Tuesday morning.

Johnson, 52, will become CEO on November 1, succeeding longtime leader Myron Mike Ullman, who will stay on as executive chairman. Johnson is set to join the companys board on August 1.

He is widely recognized and highly regarded in the retail industry for his creativity and innovation, his commitment to empowering employees to deliver an unparalleled customer experience, and to making stores exciting places where people love to shop, Ullman, who joined the company as CEO in 2004, said in a statement.

Wall Street appeared to be betting the hire of Johnson will help distinguish J.C. Penney from rival department-store chains like Macys (NYSE:M) and Nordstrom (NYSE:JWN).

Earlier this month J.C. Penney reported a 1% decline in May same-store sales, upsetting shareholders who had expected a modest sales gain.

I've always dreamed of leading a major retail company as CEO, and I am thrilled to have the opportunity to help J. C. Penney re-imagine what I believe to be the single greatest opportunity in American retailing today, the Department Store, said Johnson.

Johnson has received ample credit for the success of the Apples stores, including their unique design and implementation of handheld checkout devices. Since joining the tech darling in 2000, Johnson has helped open more than 300 stores in the U.S. and overseas.

Before Apple, Johnson served as a vice president of merchandising for stores at discount retailer Target (NYSE:TGT). Inspired by the key hire, shareholders sent J.C. Penneys stock soaring 11.33% to $33.52 Tuesday, cutting its 2011 loss to 6.8%.

In a sign of his commitment to the company, Johnson requested and has committed to make a personal investment of $50 million in J.C. Penney through purchases of 7.5 year warrants of common stock. The warrants cannot be sold or hedged for the first six years and have a strike price of $29.92, the company said.

I have tremendous confidence in J. C. Penney's future and look forward to working with Mike Ullman, the executive board and the company's 150,000 associates to transform the way America shops, said Johnson.