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J.C. Penney CFO says he and CEO Johnson are staying put

By Phil Wahba

(Reuters) - J.C. Penney Chief Financial Officer Ken Hannah on Wednesday insisted that neither he nor Chief Executive Ron Johnson has any plans to resign despite growing pressure on the company over its turnaround plans.

"I'm not resigning. Ron is not resigning," Hannah said during a presentation at an investor conference that was webcast. He was addressing market rumors earlier this week that Johnson might step down.

Last month, Penney reported disastrous holiday quarter results, with the sharpest decline yet in same-store sales since the retailer began its transformation.

Sales fell 25 percent in the first year of Johnson's plan, which did away with the coupons that brought in loyal shoppers, and which aims to refashion stores into collections of branded boutiques for hip names like Joe Fresh and Jonathan Adler.

Hannah acknowledged that the sales shortfall could slow the pace of the shop rollouts. Penney's plan calls for its 700 larger stores to be refashioned into emporia with 100 shops.

Penney has brought back many sales events and resumed giving coupons, part of its efforts to bring back its so-called "core customer," typically a price-sensitive head of household more concerned with saving money than being a fashionista.

"We have to do it at a measured pace, " Hannah said of the rollout, noting that Johnson would prefer to go faster.

While the shops have shown promising early results, the progressively worse sales declines last year -- including a 32 percent same-store sales decline for the holiday quarter -- have slammed Penney shares.

Last week, Vornado Realty Trust , whose CEO Steve Roth is on Penney's board, sold off 10 million Penney shares, a move interpreted by Wall Street as a loss of confidence in Johnson's turnaround plan.

The move caught Penney by surprise. Roth did not give any hint at the last board meeting that he planned to sell shares, Hannah said.

Hannah, while acknowledging the results so far have been "unacceptable," also said Penney needs time to execute its plan.

"It's going to take a lot more patience from our investors," he said.

J.C. Penny shares closed unchanged. They had been up 1.6 percent immediately before Hannah's presentation began.

(Reporting by Phil Wahba; Writing by Phil Wahba and Ben Berkowitz; Editing by Alden Bentley)

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