J.C. Penney CEO Marvin Ellison Resigns to Take Top Spot at Lowe's
J.C. Penney CEO Marvin Ellison is leaving the department store chain to become CEO of Lowe's, the home improvement chain reported Tuesday. Ellison came to J.C. Penney from Home Depot, so Lowe's is getting an experienced home improvement executive. Last week, J.C. Penney reported weaker-than-expected earnings. J.C. Penney's board said Tuesday that it has created an Office of the CEO with the company's executive vice presidents while it searches for a permanent CEO. The group is the team Ellison put together: Chief Financial Officer Jeff Davis, Chief Customer Officer Joe McFarland, Chief Information Officer and Digital Officer Therace Risch, and supply chain chief Michael Robbins.
Total Retail's Take: One has to wonder why Lowe's was in such a hurry to hire away a chief executive that has seen his company's market value decline by a third during his tenure, much of it in the last year. J.C. Penney's stock has been trading at historical lows and closed on Monday at $2.50 a share. Now obviously there are industry headwinds in play here, particularly in the department store category, and Ellison took over J.C. Penney at a time of disarray following the failed turnaround attempt of former CEO Ron Johnson. Yet J.C. Penney's recent performance wouldn't be inspiring an abundance of confidence in me if I was a Lowe's shareholder (I'm not). What Ellison can be credited with is leaving J.C. Penney with a stronger balance sheet, both lowering debt and refinancing terms that buy Penney more time. Furthermore, he built a strong leadership team, one that will be responsible for completing the turnaround started under Ellison's watch.