Apple 2.0

Covering the business that Steve Jobs built

The man who built the Apple Stores leaves for J.C. Penney

June 14, 2011: 12:16 PM ET

Ron Johnson, who came to Apple from Target, is headed back to his retail roots

Johnson at a 2009 store opening in New York City. Photo: PED

Among the senior vice presidents on whom Steve Jobs depends to run Apple (AAPL), three stand out: Tim Cook, the master of Apple's supply chain; Jony Ive, its genius designer; and Ron Johnson, the man who built the Apple Store.

Jobs is reportedly losing one of them today. According to the Wall Street Journal, J.C. Penney (JCP) is set to announce that Johnson has been tapped to become its new president and eventual chief executive.

J.C. Penney's shares were trading as high as $35.82 by early afternoon, up $5.71 (19%) on the news.

Johnson came to Apple in 2000 from Target (TGT) and worked closely with Jobs to design the first Apple Store -- persuading his boss, over his initial objections, to include a Genius Bar, one of the store's most successful features.

He leaves a 325-store retail empire that 10 years later generates $9.9 million per store per quarter, employs more than 30,000 full-time equivalent employees, contributes nearly 13% to Apple's bottom line and is responsible, according to one estimate, for converting 26 million Microsoft (MSFT) Windows users to the Mac.

He has been well compensated for his work. In October 2010, he sold 150,000 shares of Apple for a net gain of more than $44 million. In 2007 he cleared $112 million in a similar deal, and in March 2010 added another $46 million.

He met with an analyst from Morgan Stanley in May to talk about Apple's future retail plans, but gave no indication at the time that he was planning a major life change.

UPDATE: J.C. Penny has issued a press release that includes a quote from Johnson.

"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. 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."

In an extraordinary move, Johnson also announced that he is investing $50 million of his own money in his new employer's stock "as a demonstration of his confidence in J. C. Penney's long-term potential."

At least we know he can afford to lose it.

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About This Author
Philip Elmer-Dewitt
Philip Elmer-DeWitt
Editor, Apple 2.0, Fortune

Philip Elmer-DeWitt has been following Apple since 1982, first for Time Magazine, and now on the Web for Fortune.com.

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