Making Their Mark: Top 10 New CEOs

Change at the top is an inevitable fact of life in any profession, and retail is no exception. While the reasons behind the need to find a new chief executive vary widely, the incoming executives face a common challenge: taking the business — be it faltering or thriving — forward without missing a beat.

In the retail industry, two of the nation’s biggest chains, J.C. Penney and Sears Holdings, both welcomed new leaders at the top in 2011. So did a drug store giant. Those executives, along with seven other notable CEOs who took office last year, are profiled here.

Ron Johnson

CEO, J.C. Penney Co. Inc.

Plano, Texas

Ron Johnson, 52, hasn’t wasted any time in getting down to business at J.C. Penney Co. Inc. Although it’s been only a couple of months since he moved into the executive suite, the former head of Apple Retail is already shaking things up. (Johnson took over Penney’s merchandising and marketing responsibilities on Nov. 1, 2011, and will assume remaining CEO functions on Feb. 1, 2012.)

Johnson, who has said he wants to “re-imagine” the 109-year-old department store chain, began making waves by bringing on former associates to help shape his new team. Most prominent is Michael Francis, Target Corp.’s former marking guru, who Johnson tapped as president (Johnson himself is a former Target executive). Also new on board are two of Johnson’s former Apple colleagues: Daniel Walker and Michael Kramer, appointed as chief talent officer and chief operating officer, respectively.

In his first strategic move, Johnson engineered a deal that saw Penney take a 16.6% stake in Martha Stewart Living Omnimedia Inc. Under a 10-year agreement, the retailer will create mini-Martha Stewart shops with specially trained staff in its department stores starting in early 2013. The two companies will also set up an e-commerce site in 2013.

“The Martha Stewart brand embodies quality, beauty, inspiration and possibility, and we intend for Martha Stewart stores to be a key centerpiece of our new strategy to transform J.C. Penney into America’s favorite store,” Johnson said in a statement.

The Martha Stewart deal is likely just the beginning of that transformation. On a conference call with analysts in November, during which the chain gave a fourth-quarter holiday outlook that fell short of expectations, Johnson said that Penney was rethinking everything it does, from pricing to product to promotional strategies. He made clear his ambition, saying he was at Penney to ‘‘transform,” not merely improve the business. With so many areas at Penney in need of change — from its apparel business to its overall store experience — it will be interesting to see exactly what his next move will be.

Lou D’Ambrosio

CEO, Sears Holdings

Hoffman Estates, Ill.

In a bold step that saw it reach outside the retail industry, Sears Holdings — after a three-year search — tapped Lou D’Ambrosio, 47, to serve as CEO and president effective Feb. 24, 2011. Although D’Ambrosio had consulted closely with the company’s board of directors in the six months leading to his appointment, his professional history was firmly planted in the technology industry.

Ironically, it was that experience, which included 16 years at IBM and three years at Avaya, a Fortune 500 global telecommunications and technology firm, where he rose from senior VP global services to CEO, that answered Sears’ mandate for a leader with information and technology expertise.

The allure of D’Ambrosio’s technology background was underscored by his reputation for driving market leadership and operational improvements at Avaya, where he led a successful $8.3 billion private equity transaction that delivered attractive returns to shareholders. After leaving Avaya in 2008, he served as non-executive chairman for Sensus, a provider of clean technology.

Speaking to the role technology will play in his vision of “integrated retail,” D’Ambrosio stated in the company’s third-quarter earnings release: “It is becoming more and more obvious that the future of retail will revolve around the seamless integration of online and offline experiences.”

Under D’Ambrosio’s watch, increased reliance on technology has been a given. But in addition to emphasizing online commerce, the chain is also emphasizing smaller stores and licensing Sears’s brands. It’s also downsizing some of its locations and renting out the leftover space to other retailers. And looking to the future, Sears is rolling out new technologies and devices to aid store associates with customer service and integrating online, mobile and in-store services in an attempt to provide faster, easier ways for customers to shop.

Whether D’Ambrosio has what it takes to turn around the ailing Sears’ ship remains to be seen.

For the time being, the chain’s performance remains lackluster. Its loss widened in the third quarter, ended Oct. 29, 2011, to $421 million, dragged down by weakness in Canada, declining consumer electronics sales and softer apparel sales at its Kmart stores. Among the bright spots were online sales, up 19% over last year.

Some industry experts contend that Sears will eventually evolve into a mostly e-commerce retailer with smaller storefronts to display its online wares.

Lisa Harper

CEO, Hot Topic,

City of Industry, Calif.

From merchandising and design positions at such companies as Levi Strauss, Limited Too and Gap, to chief executive of Gymboree Corp., Lisa Harper has earned her stripes in retail.

But she faces what is probably her biggest challenge in her role as CEO of the music-influenced, teen fave Hot Topic. Teens are nothing if not fickle and that, combined with some merchandise miscues, had put the once white-hot apparel and accessories chain in a downward spiral for some time. While a management shake-up was long rumored to be in the works, the industry still was surprised when it was announced that Hot Topic board member Harper would take the reins as chief executive, effective March 2011, replacing the retiring longtime chief Betsy McLaughlin. It was especially so considering that in the time immediately prior to joining the chain, Harper had worked outside of retail, developing and operating a boutique hotel in Mexico.

Harper served as chief executive of Gymboree Corp. from 2001 until her retirement in 2006, and she is credited with improving the chain’s clothing offerings and boosting overall sales. She moved quickly to do the same at Hot Topic, where she is personally overseeing merchandising. Under her leadership, the chain also has been closing underperforming stores and revamping others.

It’s still too early to tell if Harper’s efforts will pay off — most analysts believe that the full impact