PLANO, TX—J. C. Penney Co. has concluded its year-long search for a new CEO, appointing Marvin Ellison to take the reins of the department store chain in 2015. Currently EVP of US stores at Home Depot, Ellison is generally credited with playing a key role in reversing declines in earnings at the home improvement retailer.
Ellison will join JCP Nov. 1 as president and CEO-designee. He'll succeed Myron E. Ullman, the interim CEO, nine months later, at which time Ullman will begin a one-year term as executive chairman. Ullman, who served as JCP's chief executive from 2004 to 2011, came back on an interim basis in April 2013 after his successor, Ron Johnson, lost the confidence of the retailer's board of directors.
Joining Home Depot in 2002 after 15 years with Target Corp, Ellison assumed his current post there in 2008; since 2010, the retailer has reported double-digit annual gains in profits. Ullman says that Ellison “has proven his ability to produce results by improving operations, building customer loyalty and motivating his teams. His experience and leadership are exactly what we need to accelerate the progress we have made over the past 18 months.”
Since Ullman returned to JCP, the company has succeeded in reversing a nine-quarter decline in same-store sales. However, Reuters reported Monday that the retailer has reported a report once in the past 12 quarters.
A Standard & Poor's report last week contrasted the rates of success that JCP and Sears Holdings have demonstrated in their respective turnaround efforts, although both are facing similar pressures. JCP's strategy under Johnson entailed “eliminating coupons and promotions and segmenting brands into a store-within-a-store format, but this did not appeal to the company's target customers and simultaneously alienated its core customers,” S&P reported. “JCP is now shifting its business back to a promotional model to halt the bleeding and regain lost customers.”
While this approach has been more successful than Sears' efforts to date, S&P credit analyst Tobias Crabtree notes that the outcome of both retailers' comeback plans “may depend on relevant factors that are outside their control. The financial health of the US consumer, the extent and pace of the economic recovery and the receptivity of the capital markets will all continue to play a part.”
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Paul Bubny
Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.
