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A search has begun for a successor to Allen Questrom as Penney’s chairman and chief executive officer. Questrom, who has successfully worked his magic on the retailer for more than three and a half years, may be getting ready to step down when his five-year contract expires in September 2005.
WWD has learned that Heidrick & Struggles, the executive search firm here, has been retained to conduct the search. Officials at Heidrick & Struggles declined comment, and Questrom was traveling and couldn’t be reached.
Since he assumed leadership of Penney’s in September 2000, the 64-year-old Questrom has orchestrated a revitalization of the $17.7 billion retail chain, and Wall Street has taken notice. During his tenure, Penney’s stock has nearly tripled. By the end of his first day on Sept. 15, 2000, Penny’s stock closed at $12.43 and bottomed out two months later at $8. It has appreciated ever since, reaching a peak of $36.77 just more than a month ago, and closing Friday at $36.34, up 1.28 percent from Thursday’s close.
Penney’s also has become a far more efficient business. Gross margins during Questrom’s tenure have expanded more than 800 basis points and operating margins have ballooned by more than 260 basis points.
At its annual meeting last month, Questrom gave shareholders a bullish view of the future, and may have tipped his hand when he said the turnaround he was hired to do was close to completion.
“After three years, we have successfully overcome many of the initial hurdles associated with our shift to a centralized business model,” he said. “We have not reached the top of the mountain, and the climbing is still difficult, but we are further from the base camp and making good progress toward the summit. We are progressing toward the completion of a major turnaround that many thought impossible.”
Once that turnaround is complete, sources said Questrom may well pack his bags, take some time off at his home in Aspen, Colo., and embark on a new retail challenge, or he could possibly pursue a political, social or activist cause. Some industry sources viewed Questrom’s move to Penney’s as his last hurrah and don’t believe he’d take on another retail turnaround situation as large as Penney’s, but others could see him joining another retail operation.