Penney shares shine

JCPenney shares just got a lot sexier.

The Texas-based department-store giant tapped a top Apple exec as its next CEO — a surprise move that sent its stock soaring more than 17 percent yesterday.

The jump added $1.2 billion to Penney’s market capitalization, which last week was embarrassingly similar to that of Lululemon, a tiny, 142-store Canada-based yoga clothier. Penney’s has 1,100 stores.

The stock rise, the largest one-day jump in more than a decade, created paper profits for hedge-fund tycoon Bill Ackman and real-estate mogul Steven Roth, who together last fall amassed a 26-percent stake in the Plano, Tex., chain.

Meanwhile, Apple’s Ron Johnson, who will become CEO on Nov. 1 after stepping down from the helm of the tech behemoth’s retail division, was granted $50 million in stock warrants to make up for options he’s giving up by leaving Apple. Based on yesterday’s rally, those options rose in value by more than $8 million.

Johnson will replace Myron “Mike” Ullman III, who after nearly seven years as Penney’s CEO will become executive chairman — a role Ullman is expected to keep for at least another three years, according to sources close to the company.

The hiring of 52-year-old Johnson — a star merchant credited with creating the “Genius Bars” at Apple stores and generating long lines of customers ahead of every product launch — raised hopes that Penney stores may yet regain lost ground against rivals like Macy’s and H&M.

Johnson said becoming CEO was a “lifelong dream.” While he declined to give details on his plans for Penney, Johnson said he sees a chance to “re-imagine what I believe to be the single greatest opportunity in American retailing today, the department store.”

Johnson is putting his money where his mouth is, investing $50 million of his own money into options on Penney shares — a bet that could have a huge payoff if he pulls off a successful turnaround seven years from now.

The appointment of Johnson sparked worries among some apparel insiders that Johnson has insufficient experience selling clothing — a tricky business that has claimed as casualties numerous luminaries from the entertainment and consumer-products industries.

Before his 11-year Apple stint, Johnson spent 15 years at “cheap chic” discounter Target, where he was credited with luring designer Michael Graves to design a home-products line that remains wildly successful today. [email protected]