J.C. Penney spikes after naming former Joann Stores chief as new CEO
Shares of J.C. Penney (JCP) surged in Wednesday’s pre-market trading after the company named Jill Soltau as its new chief executive officer.
The CEO role has been vacant since the resignation of Marvin Ellison earlier this year to become the CEO of Lowe’s (LOW).
J.C. PENNEY GETS ITS CEO
On Tuesday after the market close, J.C. Penney said that Jill Soltau, the former president and CEO of fabric and crafts retailer Joann Stores, will become its next CEO.
Her appointment is effective on October 15.
In a statement, J.C. Penney director and chairman of the search committee Paul Brown said “Jill stood out from the start among an incredibly strong slate of candidates,” adding that “As we looked for the right person to lead this iconic company, we wanted someone with rich apparel and merchandising experience and found Jill to be an ideal fit.”
Former CEO Marvin Ellison left the company in May to become CEO of Lowe’s, and the CEO role at J.C. Penney has been vacant ever since.
Additionally, last week, J.C. Penney announced the resignation of CFO Jeffrey Davis to pursue another opportunity. His departure was effective October 1.
As J.C. Penney looks for Davis’ replacement, the company said Jerry Murray, senior VP of finance, will serve as interim CFO.
The retailer said it will consider both internal and external candidates to replace Davis, who has been CFO since July 24, 2017.
This summer, Chief Customer Officer Joe McFarland quit after less than a year to become executive vice president, stores, at Lowe’s.
Following Ellison’s departure, J.C. Penney created an “Office of the CEO,” comprised of Davis, McFarland, Chief Information Officer and Chief Digital Officer Therace Risch and EVP of Supply Chain Mike Robbins. Just two of those executives are still working at J.C. Penney.
Mall-based retailers, including J.C. Penney, have been hurt by the increasing popularity of fast-fashion retailers like Zara, Forever 21 and H&M, as well as an increasing shift by shoppers to purchase online on sites like Amazon (AMZN).
J.C. Penney has struggled more than some of its peers, including Nordstrom (JWN) and Macy’s (M), and in August, cut its outlook for fiscal 2018 as it continued to deal with too much inventory.
In a research note to investors, Piper Jaffray analyst Erinn Murphy said Soltau has “direct insights” on J.C. Penney’s core consumer given the overlap of the consumer base in her prior roles as Joann Stores CEO, but remains sidelined on shares due to her longer-term view on department store retailing and her belief that J.C. Penney is still in the process of “right-sizing” its inventory.
Murphy has a Neutral rating and $1.50 price target on the shares.
In pre-market trading, shares of J.C. Penney are up nearly 13% to $1.76.
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