J.C. Penney CEO Ron Johnson Leaves as Exec Exodus Continues

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J.C. Penney CEO Ron Johnson Leaves as Exec Exodus Continues
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J.C. Penney CEO Ron Johnson Leaves as Exec Exodus Continues

J.C. Penney Company, Inc. (NYSE:JCP) announced that Mike Ullman will replace Ron Johnson as the company’s Interim Chief Executive Officer, effective immediately. Ron Johnson replaced Mr. Ullman as J.C. Penney Company, Inc. (NYSE:JCP) Chief Executive Officer on November 1, 2011.

Mr. Ullman had served as J.C. Penney Company, Inc. (NYSE:JCP)’s Chairman and CEO from 2004 to November 1, 2011. Prior to joining J.C. Penney, Mr. Ullman held positions at LVMH Moet Hennessy Louis Vuitton, DFS Group Limited, R.H. Macy & Co, and Wharf Holdings.

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Future pricing strategy and challenges

Analysts at Barclays expect Mr. Ullman to return J.C. Penney to many of its previous competitive pricing and promotional strategies, as they continue to believe that the moderate consumer remains very much focused on value.

Barclays also believes that many vendors will welcome Mr. Ullman’s return. J.C. Penney faces a fiercely competitive retail environment and challenges winning back its customers.

 Executive Exodus

Recently, JCP experienced the departure of another senior executive, Lisa DeStefano-Orebaugh, its VP of Strategic Marketing, who left the company for a position at Home Depot. She is the 4th senior executive to leave the company in the past seven months. Many are concerned that JCP’s poor fundamental performance could lead to the further loss of talent if sales trends don’t improve. Citi forecasts 1Q13 SSS of (-17)% and 2013 SSS of (-6.1)%. JCP’s poor performance could also hurt its ability to attract new talent.

VP of Strategic Marketing Leaves

JCP Loses Its VP of Strategic Marketing — Lisa DeStefano-Orebaugh, who has served as JCP’s VP of Strategic Marketing since March 2012 and has been with JCP since 2006, decided to leave the company to become VP of Marketing and Brand Management at Home Depot.

Other recent departures

Other Recent Management Departures — Since September, we have seen three other senior executives leave the company, including: 1) Anne Cashill, SVP of strategic Brands, departed in September 2012; 2) Greg Clark, SVP of Creative Marketing, departed in October 2012; and 3) Ken Mangone, EVP of Product Development, Design, and Sourcing, departed in November 2012.

Financial data

For the fiscal year ended 02 February 2013, J.C. Penney Company, Inc. (NYSE:JCP) , Inc. revenues decreased 25% to $12.99B. Net loss increased from $152M to $985M. Revenues reflect a decrease in demand for the Company’s products and services due to unfavorable market conditions. Higher net loss reflects Primary pension plan increase from $87M to $315M (expense), Impairment of Fixed Assets increase from $0K to $60M (expense).

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