New CEO announced
JCPenney (JCP) stock rose 9.6% in after-hours trading on October 2 following the announcement of the appointment of Jill Soltau, who worked as CEO of JOANN Stores, as the company’s new CEO. JCPenney also appointed Jill Soltau as a member of the board of directors effective October 15. Jill Soltau succeeds Marvin Ellison, who left JCPenney effective June 1, to join home improvement retailer Lowe’s (LOW).
JCPenney is currently looking for a CFO following the resignation of Jeffrey Davis, which was announced on September 27. Currently, Jerry Murray, senior vice president of finance, is serving as the interim chief financial officer of JCPenney.
Highly experienced executive
Jill Soltau is relinquishing her role as president and CEO of JOANN Stores to join JCPenney. JOANN Stores is a leading fabric and crafts retailer that operates 850 stores in 49 states. Prior to JOANN stores, Jill Soltau worked as the president of Shopko Stores. Overall, Jill Soltau has 30 years of experience in the retail industry including in department store chains like Sears (SHLD) and Kohl’s (KSS). Her expertise in clothing, merchandising, e-commerce, and store operations could benefit JCPenney as it struggles in a highly competitive retail market.
Tough road ahead
The newly appointed CEO has the huge task of helping JCPenney recover in a challenging retail market where online retailers like Amazon (AMZN) are crushing several traditional retailers. JCPenney’s net sales declined 7.5% in the second quarter of fiscal 2018, which ended on August 4. In an attempt to improve its position, the mid-tier department store chain has been taking several measures including closing unprofitable stores, strengthening online capabilities, and enhancing its merchandise offerings. The company has also been focusing on growth prospects in the home and beauty space.
JCPenney’s weak performance and the departure of key executives pushed its stock down significantly. As of October 2, JCPenney stock was down 50.6% on a year-to-date basis. In contrast, department store peers Kohl’s (KSS), Macy’s (M), and Nordstrom (JWN) have risen 34.7%, 31.1%, and 23.6%, respectively, since the start of this year.